Killer Acquisitions

73 Pages Posted: 12 Sep 2018 Last revised: 17 Jun 2019

See all articles by Colleen Cunningham

Colleen Cunningham

London Business School

Florian Ederer

Yale School of Management; Yale University - Cowles Foundation

Song Ma

Yale School of Management

Date Written: March 22, 2019


This paper argues incumbent firms may acquire innovative targets solely to discontinue the target's innovation projects and preempt future competition. We call such acquisitions "killer acquisitions." We develop a parsimonious model illustrating this phenomenon. Using pharmaceutical industry data, we show that acquired drug projects are less likely to be developed when they overlap with the acquirer's existing product portfolio, especially when the acquirer's market power is large due to weak competition or distant patent expiration. Conservative estimates indicate about 6% of acquisitions in our sample are killer acquisitions. These acquisitions disproportionately occur just below thresholds for antitrust scrutiny.

Keywords: Innovation, Mergers and Acquisitions, Drug Development, Competition

JEL Classification: O31, L41, G34, L65

Suggested Citation

Cunningham, Colleen and Ederer, Florian and Ma, Song, Killer Acquisitions (March 22, 2019). Available at SSRN: or

Colleen Cunningham

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

Florian Ederer (Contact Author)

Yale School of Management ( email )

165 Whitney Avenue
New Haven, CT 06511
United States


Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Song Ma

Yale School of Management ( email )

165 Whitney Ave
P.O. Box 208200
New Haven, CT 06511
United States


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