Washington Update White House Check On Merger Wave

With mega-merger news breaking on an almost daily basis, the White House has decided to take a hard look at the awesome m&a movement of the late 1990s. The formation of a study group featuring some of the administration’s leading economic stars and requested by President Clinton was almost inevitable, given the barrage of jumbo-sized and high-profile deals in the spring of 1998. Whether any action or policy will fall out of the review is uncertain. The study group will be led by Gene Sperling, chairman of the National Economic Council within the White House. Cast members also include Treasury Secretary Robert Rubin, Deputy Treasury Secretary Lawrence Summers, Commerce Secretary William Daley, and Janet Yellen, chairman of the Council of Economic Advisers, among others. A key goal is to review the impact of the merger wave on competition, prices to consumers, and the general economy. It will not judge individual deals, which are being screened by antitrust officials. In broad terms, the Clinton administration has not taken a stance against mergers in general because key deals or deal clusters have been concentrated in industries that must restructure in response to economic, technological, geographic, and other influential forces. However, regulators have become more active over the last year in challenging deals that they claimed crossed acceptable industry concentration or locked up too much market power.