ed by someone else. It certainly is not hostile to those who find bids on their stock attractive. Economic historian Robert Hessen made an important point about hostile takeovers when he testified in Congress about conglomerate mergers: If a company remains privately held, the owners thereby guarantee themselves against a hostile takeover. However if they go public, that is, if they allow shares of their stock to be traded on public exchanges, then they know that one of the inherent risks of being a publicly traded company is that someone or some coalition of people can buy enough stock to be able to elect one or more directors and ultimately to change the policies and personnel of that company... There is a variety of (private) options to keep a company, even a publicly traded company, from an adverse or hostile takeover without needing to ban conglomerate mergers... There are much more specific remedies which any good lawyer could recommend to a company to protect itself from the possibility of a takeover. Another thing about mergers that concerns some people is their effect on economic growth. Business Week, for instance, declared in a recent editorial that "mergers are not growth." Others say they do not create jobs or make better use of capital. The most fundamental answer to these complaints is, so what? In a free society, people should be at liberty to trade their property without having to justify it to anyone in any terms. But the answer in economic terms goes further. Two parties agree to swap their property only when each sees prospective benefits as a result - otherwise the exchange does not occur. Mergers entail the exchange of titles to capital goods, whose price is determined by the market's assessment of their capacity to produce what consumers want most. One company does not acquire the assets of another unless it expects them to be profitable, that is, produce things consumers will be willing to pay enough for. To beli...
