Mergers and acquisitions in the hightech industry: a literature review (original) (raw)
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Technology Analysis & Strategic Management, 2002
A large part of the literature from industrial organisation and management expects that, compared with unrelated M&As, related M&As show superior economic performance because of synergetic effects that follow from economies of scale and scope. The current contribution takes the debate on the effect of different M&As somewhat further by studying the effect of M&As on the technological performance of companies. In this study the technological performance of M&As is related to a high-tech sector, i.e. the computer industry. The main result of this research is that the so called strategic and organisational fit between companies involved in M&As seem to play an important role in improving the technological performance of companies (mergers, acquisitions, technological performance) have put this topic on the research agenda.
2000
A large part of the literature from industrial organisation and management expects that, compared with unrelated M&As, related M&As show superior economic performance because of synergetic effects that follow from economies of scale and scope. The current contribution takes the debate on the effect of different M&As somewhat further by studying the effect of M&As on the technological performance of companies. In this study the technological performance of M&As is related to a high-tech sector, i.e. the computer industry. The main result of this research is that the so called strategic and organisational fit between companies involved in M&As seem to play an important role in improving the technological performance of companies (mergers, acquisitions, technological performance) 1INTRODUCTION The central topic of this paper concerns the possible effect that mergers and acquisitions (M&As) have on the technological performance of companies. This subject of the technological effect of M...
Technology Based Mergers and Acquisition20200701 85319 luuv51
Rapid technological changes, shortened product life cycle, limited resources, and increasingly intensive competition have forced many companies to source and develop their technology and innovation capability quickly and externally. “Successful organizations are constantly seeking ways to foster innovation and new product or service development” (Kennedy, Payne, & Whitehead, 2002, p.149), especially in technology-intensive industries. Given the high level of uncertainty, time-consuming nature, and inertia of technology exploration/exploitation through internal Research and Development (R&D), the strategic use of mergers and acquisitions (M&A) to obtain new technological knowledge/capabilities has become a common corporate phenomenon. Therefore, this article reflects on the current state of knowledge concerning the technology-based mergers and acquisitions (TBM&As) with regard to the following issues: (1) How do TBM&As perform? (2) What are the contingency factors and how do they impact TBM&A performance? (3) What kind of analytical approaches and theories are adopted in the research? (4) How can the TBM&A phenomenon be studied in the future in order to further develop knowledge concerning TBM&As? These questions are the focus of this article.
Medium Sized High Tech International Acquisitions: A Longitudinal Perspective (1990-2011)
International Business Research, 2012
This article examines the various forms and strategical options that are found and employed when merging companies of any size with medium-sized technological companies, with a view to understanding what outcomes are involved. This research paper is based on a sample consisting of 5 738 mergers and acquisitions transactions in the high-tech sector, particularly those involving innovative companies with technological interests. The aim of this research is to show how these strategic manoeuvres operate, using a multi-criteria analysis chart that includes the size of the company, the level of participation, the nature of diversification, the duration of transactions and value ratios. In this way, the research will help to provide better understanding of the characteristics of these technological merger acquisition operations, creating a typology of operations and manoeuvres and correcting some of the beliefs commonly held.
Economics and Business Review, 2016
The consistent growth of mergers & acquisitions (M&As) activity around the world in the last decade, and the volume of capital involved in such transactions, stand in sharp contrast to the high failure rates evident in M&As. The inconsistency amongst empirical findings on M&A performance is based on a variety of settings and on different measurements investigated under the generic label 'M&As'. This paper claims that we need to differentiate between general M&As and those involving technology firms acquisition. The combination of the drive, the dynamic process and the human capital capabilities which characterize the latter, is expected to result in a more successful result than was reported. Hi-tech innovative acquirers can benefit from buying small, start-up firms by adding valuable resources, increasing market power and initiating strategic renewal. It is proposed that in addition to the traditional critical success factors (CSFs) identified as the most influential variables on M&A performance, attention needs to be given to the acquired firms' motivation to succeed and to the performance of start-ups in the hi-tech sector. Some unique variables in that configuration need to be researched, amongst them are: trust, readiness for change, commitment, knowledge transfer and preserved autonomy. By doing that an opportunity will be given to examine if the general research paradigm of M&As fits the hi-tech's circumstances or if a separate one is needed to measure the merger performance of start-ups. It is assumed that the Israeli's start-ups mergers represent a more successful case and that they will perform with more positive results. This paper presents a theoretical framework for investigating M&A performance in the hi-tech area through an interdisciplinary approach. The article is organized as follows: The first section outlines the various theoretical ideas and research done on M&As. The second part deals with some critical reviews that aim to explain the confusing data produced from that paradigm. Section three turns to the emerging area of the technological business environment highlighting the uniqueness of the Israeli start-up phenomena. The last section combines performance with hi-tech in order to provide new insights on the M&As processes for executives engaged in both planning
Innovation and Mergers & Acquisitions premia in technology-related sectors
2017
This study aims to analyse the role of innovation in M&A in the USA between 2000 and 2017. It specifically aims to prove whether the acquirer is willing to pay an extra premium for M&A deals where a target has an intensive R&D usage. Since modern firms heavily rely on innovation as a drive for their competitive advantage, it is expected that the R&D is a valuable asset for the firm and the acquirer is willing to pay more in order to gain control over R&D activities of the target firm. The model presented in the research incorporates firm-specific variables as well as macroeconomic variables in order to measure whether they have an impact on the M&A premium or not. Influence of innovation measured by R&D intensity on the M&A premium was confirmed for the sample based on four multivariate linear regressions that introduced independent variables stepwise due to the sample's modest size. This is the first study that intends to use R&D intensity in order to trace its influence on M&A premium on the US market for listed firms only, cross border M&A being excluded from the observations.
Technology, innovation and performance in corporate mergers: A managerial evaluation
Technovation, 1987
This study focused on the managerial perceptions of the success of corporate mergers and acquisitions as a means of acquiring new technologies. Based on the data from 31 acquisitions, it was found that the professed motives were rarely achieved. We found that a proactive and aggressive R & D posture in the postacquisition period was positively related with performance. Improvedpost-acquisition performance was related with competitive environment, which necessitated incremental changes in improvements ofproducts andproductionprocesses. Sharing of corporate technology with the acquired division improved the division's performance. Marketing help from the corporation also improved division's performance. Finally, organizational integration without an excessive increase of formalization was found to be key to enhance the performance of the acquired division. BACKGROUND Can a firm that is looking for a way to enter a new market do so by acquiring the technology of another firm through financial merger or acquisition? Although some research has been carried out to answer this question [ l-31, more is needed. Most studies of acquisitions and mergers focused on their larger benefits and d&benefits. Moreover, these studies have not reached consistent conclusions.