Judgement from the Sideline: Investors’ Perceptions of M&A Value Creation in High-Tech Industries

Abstract

Most of prior research on technological mergers and acquisitions (M&As) emphasized numbers and citations of patents as indicators for an acquirer’s innovation performance after the acquisition Different from previous focus this study argues that market value actually can better help managers evaluate post-acquisition outcomes Specifically this study sheds light on high-technology M&As and investigates investor’s reactions to the announcement of M&As Empirical tests on 378 M&As undertaken during 2007-2015 in the high-technology industries find that business relatedness contributes to higher market value and larger firm size of the target relevant to the acquirer affects market value positively right after acquisition announcement but negatively over a longer time period This finding that the effects of firm size change over time suggests that acquirers should be cautious about whether they are capable of managing larger targets However previous cooperative experiences and the acquisition of older targets do not have signi?cant influences on market value across different observation windows indicating that these two factors do not give investors either positive or negative signals Overall this study examines an important means of post-acquisition performance evaluation i e market value in the context of technological acquisitions and provides the insights into those factors influential to investors’ perceptions Therefore managers ought to be aware of investors’ perspectives when assessing acquisition outcomes

Date of Award	2017 Mar 10
Original language	English
Supervisor	Chiung-Hui Tseng (Supervisor)