Buying up rivals softens competition and enables firms to charge more.
http://www.economist.com/news/finance-and-economics/21565609-economies-scale-run-out-certain-point-largest-firms-america-may-be
PS One of the best business books i ever read is How to be a Billionaire by Martin S. Fridson. In this book from 2001 Martin goes through the top people on the rich list. From Bill gates and Sam Walton until John D. Rockefeller and try to capture what they did to be there. One of the themes is , kill the competition. He claims if you are in a very competitive market is very difficult to make serious money.
To be number one is a very good position to be. Consolidation works. The idea of Jack Welch that GE will only compete in markets where they are nº1 or nº2 makes sense.
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