Record Merger Activity Sets Antitrust Regulators In Motion

Policy Watch

• As mergers are at an eight-year high, U.S. antitrust enforcers are setting up their game. This week’s developments highlighted the breadth of the antitrust agencies’ recent efforts. On Wednesday, the Justice Department filed suit to block General Electric Co.’s planned $3.3 billion sale of its appliance business to Electrolux AB. Hours before, the department confirmed it was investigating whether the nation’s top airlines colluded on expansion plans. Like others facing antitrust challenges, the companies vowed to vigorously defend the deal. This tug-of-war over industry consolidation was radically different when President Obama took office in 2009, during the financial crisis. The president had pledged to reinvigorate antitrust enforcement, but his appointees at the Justice Department and Federal Trade Commission arrived at a time when the business community’s appetite for significant mergers was limited. Now, with the merger market emboldened by a strengthened economic climate, antitrust enforcers, too, are gaining confidence, in part because of a favorable political landscape where members of both parties worry about companies growing in a way that could harm the economy.[WSJ] 

• B.P. will pay $18.7 billion to settle Gulf Coast Oil Spill. BP announced yesterday its deal with the U.S. government, five Gulf States, and more than 400 local governments. The agreement comes five years after the Deepwater Horizon rig explosion spewed millions of gallons of oil into the Gulf of Mexico. Eleven workers were also killed in the accident. The company’s payments, to be made over the next 18 years, “settle all state and local claims arising from the event.” Yet, there still remains legal work to be done; U.S. Attorney General Loretta Lynch said the Justice Department will work diligently over the next several months to incorporate the agreement into a consent decree, which would be open to public comment before court approval. The settlement brings BP’s tab for the spill to $53.8 billion, more than its combined profits since 2012. [NPR]

Economic Indicators & News

• Unemployment dropped by 2 tenths to 5.3 percent. Initial jobless claims came in at 281,000 in the June 27 week, which is up 10,000 from the prior week but still remains low. The 4-week average inched 1,000 higher to a 274,000 level that is little changed from a month ago. [Bloomberg]