Acquiring Larger or Smaller Targets?

Abstract

Obtaining resources and maintaining competitive advantages are known to be a key motivation for firms to take mergers and acquisitions (M&As) into consideration In this study we examine target selection of larger or smaller firms based on how deep the acquirers’ pocket is and how well they know about the target industry i e acquirers’ financial performance and similarity of target industry Since resources play an important role in the high-tech industry we further examine how resource deepening and resource extension impact the tendency of target selection By analyzing a sample of 400 international M&A cases from 2008 to 2017 we observed that giants don’t always acquire giants; on the contrary chances are that firms with good financial performance may take over a start-up company if the resource owned by the target fit into their business requirement (i e resource deepening or resource extension)

Date of Award	2020
Original language	English
Supervisor	Chiung-Hui Tseng (Supervisor)