—By Susannah Snider, Staff Writer U.S. NEWS
Are mergers good or bad for consumers? It depends. #mergers http://entrepidinc.news/are-mergers-good-or-bad
AT&T and Time Warner. Sprint and T-Mobile. Sinclair Broadcast Group and Tribune Media. Heinz and Kraft.
It seems like every other month is dominated by news of a proposed or completed corporate merger. And while those partnerships can result in a major financial boost for the corporations involved, consumers are left scratching their heads and asking, “What does this mean for my finances?”
The short answer for those curious consumers is: It depends.
“There are some mergers and acquisitions that will probably promote consumer welfare,” says Bill Galston, senior fellow at the Brookings Institution, a District of Columbia-based think tank. “But as some research has found, there are other [mergers and acquisitions] that point in the opposite direction.”
Here’s what regular folks should know about the impact of corporate mergers on their personal finances.
A merger takes place when separate companies become a single new entity. The more newsworthy mergers tend to be “horizontal,” experts say. That means the consolidation happens between businesses operating in the same space, like when two airlines join forces. Other mergers are “vertical,” meaning the two companies operate at different stages of the supply chain, like when an automotive company buys a tire manufacturer.
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