Merger policy until the 1980s generally frowned upon efficiencies achieved through merger, based on the theory that a more efficient firm is a stronger competitor with the power to injure actual or potential competitors.

In the last decade, however, recognition of the pro-competitive impact of efficiencies has grown. The revised efficiencies section of the Horizontal Merger Guidelines, released by the Department of Justice and the Federal Trade Commission in April 1997, acknowledges that “the primary benefit of mergers to the economy” is their potential to generate cost savings.

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