1. Mergers and Legislation Economics Unit 4
PowerPoint #3
Mergers and Legislation
Economics Unit 4

2. Essential Questions:
Explain the three different types of mergers: conglomerates, vertical, and horizontal.
Analyze how the Sherman Antitrust Act and Clayton Act are meant to protect competition in the free market.

3. Mergers There are three types of mergers: Conglomerates
Vertical mergers
Horizontal mergers
WATCH TO 2:30 – skip the rest

4. Mergers: Conglomerates
Conglomerates are the merging of two corporations involved in at least four or more unrelated businesses.

5. Mergers: Vertical
Vertical merger is merging of two corporations in same chain of supply.
Pay attention and analyze these two examples of vertical mergers

6. Mergers: Horizontal
Horizontal merger is the merging of two corporations in the same business.
Pay attention and analyze these two examples of vertical mergers

7. Antitrust Legislation
Sherman Antitrust Act (1890) prevented new monopolies or trusts from forming and broke up existing ones.

8. Antitrust Legislation
Clayton Act (1914) sought to clarify the laws in Sherman Antitrust Act by prohibiting or limiting a specific number of business practices.

9. Antitrust Legislation
Federal government must determine whether merging of two companies will significantly lessen competition.
Federal Trade Commission

10. Essential Questions:
Explain the three different types of mergers: conglomerates, vertical, and horizontal.
Analyze how the Sherman Antitrust Act and Clayton Act are meant to protect competition in the free market.