Celler-Kefauver Antimerger Act

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Celler-Kefauver Antimerger Act

An American antitrust law passed in 1950 that closed a major loophole in the Clayton Act. While the Clayton Act prohibited mergers that reduced competition, it allowed companies to buy individual assets of competitors. Some companies did this to such an extent that it reduced competition, which had the potential to effectively sideline the Clayton Act. The Celler-Kefauver Act closed this loophole, giving the government the power to stop vertical mergers and asset acquisitions regarded as reducing competition. It is often simply called the Antimerger Act.

Celler-Kefauver Antimerger Act

A 1950 federal antitrust law that updated the Clayton Act by severely restricting anticompetitive mergers resulting from acquisition of assets.
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These actions were followed by the passage of other enforcement acts, such as the Celler-Kefauver Act (1950), the Williams Act (1968), and the HartScott-Rodino Act (1976), that control the way businesses are allowed to combine while guarding shareholder interest.
An important aspect of the controversy involves the effect of enforcement of the merger law, Section 7 of the Clayton Act, as amended by the Celler-Kefauver Act in 1950.
Shleifer and Vishny |1990~ state that the "most likely reason for diversification |in the 1960s~ was the antitrust policy which turned fiercely against mergers between firms in the same industry when the Celler-Kefauver Act passed in 1950" and that "the failed conglomerate wave was a direct consequence of this policy".