Defying all of the pundits, the Justice Department announced its decision to close its investigation of Whirlpool's proposed acquisition of Maytag. The agency concluded that the acquisition is unlikely "to reduce competition substantially" due to the presence of "strong rival suppliers with the ability to expand sales significantly" and the "large cost savings and other efficiencies that Whirlpool appears likely to achieve."
According to the government's announcement, it concluded that Sears' Kenmore brand competes against Whirlpool and Maytag even though Whirlpool manufactures
Demonstrating that high market shares alone don’t necessarily lead to a merger challenge, the Justice Department’s press release reveals the other factors considered by the government. The government emphasized what appears to be a critical factor—the excess capacity of existing manufacturers. Also significant was the recent success enjoyed by foreign manufacturers in the with key appliance retailers, including Best Buy and Home Depot. Finally, the government considered “the detailed analyses” provided by the parties to substantiate their claimed efficiencies. According to the government, “[t]hese efficiencies further reduce the likelihood that the transaction might harm consumer welfare.”
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