The Celler-Kefauver Act

AAA

DEFINITION of 'The Celler-Kefauver Act'

A 1950 refinement of previous antitrust legislation dealing primarily with mergers. The Celler-Kefauver Act targets mergers where companies purchase suppliers, and occasionally competitor's suppliers, in order to secure production. The Clayton Act already contained language addressing horizontal mergers, but the Celler-Kefauver Act added vertical mergers and conglomerate mergers to the growing list of possible antitrust violations.

INVESTOPEDIA EXPLAINS 'The Celler-Kefauver Act'

Vertical and conglomerate mergers aren't illegal under the Celler-Kefauver Act unless they significantly reduce competition. Similar to other antitrust acts, actions that reduce competition aren't always easy to classify under Celler-Kefauver. Both types of mergers raise the barriers for entry by making competitors internalize more production to match the cost savings that come from economies of scale. However, as long as there is at least a couple other companies capable of keeping up, barriers can be raised as high as the duo or trio can handle.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Sherman Antitrust Act

    Anti-monopoly U.S. legislation which attempted to increase economic ...
  3. Price Fixing

    Establishing the price of a product or service, rather than allowing ...
  4. De-Merger

    A business strategy in which a single business is broken into ...
  5. Predatory Dumping

    A type of anti-competitive event in which foreign companies or ...
  6. Monopolistic Market

    A type of market that features one, if not all, of the traits ...
Related Articles
  1. Fundamental Analysis

    Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
  2. Investing Basics

    The Merger - What To Do When Companies Converge

    Learn how to invest in companies before, during and after they join together.
  3. Personal Finance

    Early Monopolies: Conquest And Corruption

    This structure can be very effective, but it is also known for its abuse of power.
  4. Personal Finance

    A History Of U.S. Monopolies

    These monoliths helped develop the economy and infrastructure at the expense of competition.
  5. Personal Finance

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  6. Bonds & Fixed Income

    8 Reasons M&A Deals Fall Through

    Mergers and acquisitions can mean big success. But what about all the deals that fall through?
  7. Mutual Funds & ETFs

    The Buy-Side Of The M&A Process

    With almost $2 trillion in sales yearly, find out how these mergers and acquisitions take place.
  8. Options & Futures

    What Makes An M&A Deal Work?

    Do you know why companies merge? Here we'll take a look at three successful company acquisitions and why they succeeded.
  9. Stock Analysis

    Breaking Down the Halliburton Baker Hughes Deal

    Halliburton is using a downturn to get bigger and stronger in the long term, and the company is getting Baker Hughes at a reasonable price as a result.
  10. Brokers

    Key Differences Between M&A Advisors And Business Brokers

    For a buy, sale or partnership for one's business, one needs brokers and advisors to proceed ahead. Here are the key differences between business brokers and M&A advisors.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center