Sordid Story: Corporate Executives Get Self-Gratification From M&As

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Sadism and masochism (abbreviated as S&M) are generally frowned on in polite society as perverse acts of sexual gratification. But what should we make of M&As?

This is Wall Street’s abbreviation of mergers and acquisitions, which are acts of self-gratification practiced by top corporate executives. Such financial couplings can also be judged as socially perverse, since they eliminate economic competition, slash jobs, raise consumer prices, shrivel markets for local suppliers, stifle innovation, and dramatically increase inequality. Despite all this, M&As are cheered by the moneyed establishment as wholesome corporate friskiness to be tolerated because they produce gushers of wealth.

Yes… but wealth for whom?

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Consider the brazen merger now being hotly pursued by Kroger and Albertsons – two supermarket giants that themselves are spawns of multiple mergers, having consolidated dozens of previously independent competitors like Safeway, Ralphs, Vons, and Randalls. Thousands of employees were punted, hundreds of stores closed… and grocery prices soared. Yet, the two remaining giants now want anti-monopoly regulators to believe in a “magic math” theory that subtracting competitors adds competition.

Bear in mind that neither chain is on the skids – both are making billions in profits, their CEO pay is astronomical, and investors are reaping fat dividends. But, too much is not enough, and mergers are a profiteering freeway that paves its way to a bonanza of monopoly pricing. And that’s why these two are frantic to cozy up, having already paid nearly a billion dollars in fees to lawyers, bankers, lobbyists, and PR agents to consummate their merger.

Oh, there’s one more crude incentive that stimulates these corporate trysts: Executives quietly pocket merger payments if their deals go through. Albertsons’ CEO, for example, is set to receive $43 million for merging with Kroger.