Target choice and unique synergies in global mobile telephony: A dyadic approach
|Type:||Articles in Refereed Journals (International)|
|Published by:||Industrial and Corporate Change, 27(2), pp. 371-386|
The success of acquisitions rests on detecting and realizing unique synergies between buyer
and target through their dyadic relationships. We study the role of unique dyad-specific
synergies in the selection of takeover targets in the global mobile telecommunications industry.
Firms use their foresight to select specific targets: First, they lower integration costs by selecting
geographically close targets. This effect is stronger when buyer and target are in the same
country, but only if the market is not so concentrated that it provokes regulatory interventions.
Second, they select targets that can be acquired at a modest bid premium because they have
asymmetric bargaining power. Finally, they select targets which can generate significant
synergies due to technological synergies. Our work expands the existing target selection
literature by studying dyad-specific factors within a single industry. This helps us in identifying
unique synergies as drivers of acquisition performance.