title: The takeover wave of the 1980s.
abstract: The takeover wave of the 1980s moved large enterprises toward specialization and away from the diversification of the 1960s. The easy availability of funds made acquisitions affordable, while the hands-off antitrust policy allowed mergers between two firms in the same industry. Hostile takeovers and leveraged buyouts fostered the break up of conglomerates and the sell-off of divisions to buyers in the same industry; they helped speed the economy-wide move toward specialization. The poor performance of conglomerates indicates that this trend toward specialization is likely to make U.S. industry more competitive. Current state antitakeover laws are probably the result of intense lobbying by managers trying to entrench themselves; these laws do not promote competitiveness of U.S. industry. In contrast, the current accommodating federal antitrust stance encourages specialization.
authors.forename: A
authors.initials: A
authors.lastname: Shleifer
authors.forename: R W
authors.initials: RW
authors.lastname: Vishny