Mack Ott and G. J. Santoni discuss the recent increase in corporate takeover activity and examine a number of criticisms that have been leveled at this method of changing corporate ownership. Instability in financial markets and the misdirection of corporate planning to short-term goals have been attributed to corporate takeovers. Takeovers also have been criticized for stripping management, labor, and owners of career, livelihood, and wealth. The authors’ conclusions contrast sharply with those critical of the recent wave of takeovers. Ott and Santoni find that both theory and evidence suggest that takeovers are expected to produce a more efficient use of the targeted firm’s assets and that the firm’s owners generally benefit through a rise in the value of their ownership shares. As with any economic change, third-party effects probably exist. The third-party effects most frequently advanced by the critics, however—negative employment effects, higher interest rates or neglect of long-term planning—do not seem to be caused by merger and takeover activity.