Elizabeth Warren Wants to Spoil the Megamerger Party
The U.S. presidential candidate's bill to rein in dealmaking is probably too stringent, but outdated antitrust laws aren't working either.
The new trustbuster?
Photographer: Scott Olson/Getty Images
The merger floodgates broke open five years ago, and now U.S. Senator Elizabeth Warren wants to close the hatch. Her proposed bill to substantially restrict big corporate tie-ups is more a presidential campaign statement than viable legislation — and it certainly won’t score her any more points with the Wall Street crowd — but she is calling attention to the maniacal pace of dealmaking in corporate America and the need to modernize antitrust laws that have permitted some recent problematic transactions.
More than $7 trillion of takeovers of U.S. companies have been announced since this day in 2014 — 52,694 companies to be exact.1 That compares with just $4.4 trillion of deals in the previous five-year period. The transactions grew over time as balance sheets flush with cash and income statements desperate for growth created a perfect storm, which more often than not was stoked by pliable regulators. The Walt Disney Co. acquired 21st Century Fox Inc.; Charter Communications Inc. bought Time Warner Cable Inc.; CVS Health Corp. took over Aetna Inc.; Marriott International Inc. merged with Starwood Hotels & Resorts Worldwide Inc.; and T-Mobile US Inc. is trying to buy Sprint Corp. Those are just some of the more recognizable names.