conglomerate. As the antitrust laws made Horizontal and Vertical Mergers more difficult, Conglomerate Mergers became more popular and are very common today.Conglomerate Merger - is the merger of firms in unrelated industries. If Coca-Cola mergers with a movie producer, that would be a Conglomerate Merger. An additional reason Conglomerate Mergers became popular is the view that the business cycle affects different industries at different times. Thus, a firm with operations in many different industries would have some divisions expanding when other divisions were experiencing sales downturns. Thus, keeping the overall business stable or growing.Corporate Mergers: Method or Madness? There is an easy way to tell when a person misses the fundamental point of economics: He or she discusses the subject in the metaphors of warfare and the animal kingdom. This is so common it goes unnoticed. But the significance of using terms of violence to describe voluntary exchange for mutual benefit should not be underrated. We're familiar with the terms cutthroat competition, predatory pricing and import invasion to describe processes in which people freely offer to trade their property at the best terms they can find. How ironic that such processes are couched in these metaphors, while actual violent processes are called "economic planning." Nowhere is this more vividly illustrated than in the coverage of and comment on the recent spate of corporate mergers. The Du-Pont/Conoco merger last summer set off an hysterical display of economic ignorance that still might find its way into law. Unfortunately, this ignorance is found not only in the writing of journalists and antimarket spokesmen, but in the articles and speeches of business spokesmen who themselves have fallen victim to the confusion. Typical of the way mergers have been discussed is this opening paragraph from Newsweek's July 27 (1981) cover story (the italics are mine): One prominent banker ca...
