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[quote]QUOTE: Originally posted by erikthered Yikes. Given the rather poor history of rail mergers in the past ten years I think you would see a lot of controversy over this one. Although the ICC no longer exists, I would expect to see some interest from the Department of Justice and probably the Securities and Exchange Commission as well. [/quote] If I remember my Managerial Economics, mergers are governed by the Herfendahl-Hirshman Index, or HHI. The HHI is the sum of the squared shares of the market for every firm in a particular market times 10,000. Under the merger guidelines of the DOJ, if the HHI of a merger will be greater than 1,800 or is greater than 1,800 before the merger, the merger is challenged. If the HHI is between 1,000 and 1,800, then the merger is closely examined. Bear in mind these are only guidelines, mergers are often allowed even when the HHI is large, provided certain conditions are met, such as increased efficiency, emerging new technology, or one of the firms has financial problems, or significant foreign competition. I don't believe the DOJ or the FTC would allow this merger to occur. I know this thread was started in jest, but some are taking this seriously. [:D]
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