Firm Acquisitions and Technology Strategy: Corporate versus Private Equity Investors
AbstractOver the last few years, worldwide mergers and acquisitions (M&A) have increased sharply both in terms of value and volume. This development has not only been driven by corporate acquirers but also to an increasing extent by private equity investors. In this paper, we analyze differences in acquisition motives for corporate and private equity investors. We pay particular attention to the importance of technological assets in M&A transactions and distinguish between the technological value of patents and their potential to block competitors in technology markets. Our empirical results for European firm acquisitions in the period from 1999 to 2003 show that both corporate and private equity investors pay a higher price for target firms with valuable patents. However, patents with a potential to block technology competitors seem to be only of interest to corporate investors, especially if these are closely related to the patent portfolio of the acquirer. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 07-066.
Date of creation: 2007
Date of revision:
M&A; technology; patents; corporate and private equity investors;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-19 (All new papers)
- NEP-COM-2008-01-19 (Industrial Competition)
- NEP-CSE-2008-01-19 (Economics of Strategic Management)
- NEP-IPR-2008-01-19 (Intellectual Property Rights)
- NEP-TID-2008-01-19 (Technology & Industrial Dynamics)
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- Hussinger, Katrin, 2007. "Inventors? Response to Firm Acquisitions," ZEW Discussion Papers, ZEW - Zentrum fÃ¼r EuropÃ¤ische Wirtschaftsforschung / Center for European Economic Research 07-078, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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