The Federal Trade Commission is reviewing Lockheed Martin’s proposed merger with rocket-engine maker Aerojet Rocketdyne. The merger would result in Lockheed absorbing part of its supply chain in a fairly typical example of vertical integration. There are at least five reasons why the resulting concentration need not raise antitrust concerns. First, vertical integration is a common business model in the rocket industry. Second, FTC has approved a similar transaction in the recent past. Third, remedies are readily available to resolve any competition concerns. Fourth, alleged anti-competitive aspects of the proposed combination are neither compelling nor particularly noteworthy. Finally, the consequences for competition in the marketplace could be far more serious if the merger is blocked than if this relatively prosaic deal is permitted to go forward. I have written a commentary for Forbes here.
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