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A fresh round of merger and acquisition headlines has brought home a clear point: Many U.S. industries are consolidating. With the prospect of fewer, and more powerful, players in many sectors, shouldn't antitrust alarm bells be going off in Washington?
The "deal flow," as financial pros like to call it, is regaining momentum after a brief credit crunch-induced hiatus. In the beleaguered airline industry, both management and Wall Street see salvation from horrendous cost pressures with mergers.
So where is the Justice Dept.? Shouldn't antitrust regulators flex their muscles and start blocking deals? In many cases probably not--especially if the welcome mat stays out for international competitors. The risk that mergers will lessen competition and strengthen market power in an industry can be significantly reduced when competitors from Brazil to Shanghai to Frankfurt compete for profits and markets in a business.
Source: Business Week, http://www.businessweek.com
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