CPAs are most likely to focus on financial data, but they must look at postmerger market implications, too. A merger may get a thumbs-down if advisers are not familiar with antitrust economics. If you're a CFO or financial executive at a company that is seeking a more profitable position in the market through a merger or acquisition, it's important to understand what antitrust issues regulators will look at and challenge. CPAs are most likely to focus on financial data, but it's important that they consider postmerger market implications, too. Although it's relatively easy to understand domestic market share, global market issues are complicating the merger process.
More mergers mean more regulatory activity and antitrust litigation.
In 1998, the Federal Trade Commission's Bureau of Competition spent more hours on merger litigation than in any previous year, expending over 40 person years. Companies merge to boost market share, eliminate competitors or acquire important suppliers needed by competitors. A red flag for regulators appears if a newly merged company will dominate a market. In one example that took place in 1998, United States v . The complaint alleged that the merger would have created unprecedented vertical and horizontal concentration in the defense industry, which substantially would have lessened, and in several cases eliminated, competition in major product markets critical to the national defense.