Unique Synergies in Technology Acquisitions

Posted: 19 Jun 2019

Date Written: November 1, 2016

Abstract

Acquisitions are often seen as an instrument to outsource the R&D function of the firm, but we know little over how acquirers profit from the redeployment of the target’s resources. Using the strategic factor market theory as a guide, this paper explores the conditions under which technology acquirers capture value by generating unique synergies with the target. Analysis of a sample of technology acquisitions suggests that private synergies exist when the acquirer is more technologically proximate to the target as compared to other potential acquirers. This results in a higher acquisition likelihood and stock market reaction to the acquisition announcement. It is also shown that patent ownership allows acquirers to take advantage of heterogeneous resource complementarity and generate inimitable synergies with the target firm. But this effect is evident only in complex technology industries where a relatively high patent portfolio overlap increases the acquisition likelihood and stock market reaction to the acquisition announcement.

Keywords: Technology acquisitions, Unique synergies, Private synergies, Inimitable synergies, Patents

Suggested Citation

Chondrakis, George, Unique Synergies in Technology Acquisitions (November 1, 2016). Research Policy, Vol. 45, No. 9, 2016, Available at SSRN: https://ssrn.com/abstract=3402592

George Chondrakis (Contact Author)

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Do you want regular updates from SSRN on Twitter?

Paper statistics

Abstract Views
156
PlumX Metrics