Same-sex unions are not the only kind of marriage on the rise. In the business world, same-industry combinations are happening at breakneck speed as large corporations join with their rivals.
The same-industry marriages that will probably affect the largest number of people are those being proposed in the health insurance industry, where Aetna is seeking to buy Humana, and Anthem (formerly known as Wellpoint) is playing the mating game with Cigna, though UnitedHealth may get in on the act. Additional concentration does not bode well for keeping insurance premiums under control.
There’s a lot more going on. This was driven home to me recently while I was updating the parent-subsidiary linkages in the Subsidy Tracker database I oversee in my role as research director of Good Jobs First. I had to make adjustments relating to dozens of recently completed mergers.
Among these are the combination of Heinz and Kraft Foods arranged by Warren Buffett and the Brazilian investment firm 3G Capital, the union of deep-discount chains Dollar Tree and Family Dollar, and the merger of packaging giants MeadWestvaco and Rock-Tenn into a combined firm called WestRock.
An interesting trend is increasing German control over what remains of the U.S. industrial sector. Siemens recently completed its purchase of the industrial equipment firm Dresser-Rand, and ZF Friedrichshafen acquired TRW Automotive.
Other deals still in the pipeline include Staples’ bid for Office Depot, Expedia’s plan to acquire Orbitz (after gobbling up Travelocity), Monsanto’s offer for Syngenta, and AT&T’s plan to buy Dish Network, which in the meantime is looking to acquire T-Mobile.
Thanks to all this activity, 2015 could set a new record for M&A activity. Along with the economic benefit of consolidation, large companies are taking advantage of the mostly lax regulatory climate. Business apologists complain when the occasional deal — such as the attempted mergers of Sysco and US Foods, and Comcast and Time Warner Cable — is blocked, but the fact is that a large portion of proposed combinations face little opposition. And when regulators do protest, they can often been placated with relatively minor concessions, such as the requirement that Dollar Tree sell off only 330 out of the more than 8,000 outlets in the Family Dollar chain.
These corporate combinations are all about profit. In a country that claims to revere free competition, large corporations tend to move in the opposite direction: they want to control markets. While human marriages, as Justice Kennedy put it, are all about dignity, these business unions are about power and are thus one kind of marriage we should not be celebrating.