Essays on high-tech acquisitions and divestitures.

Since the early 1990s there has been a substantial increase both in mergers and acquisitions (M&A) as well as in divestitures of high-tech companies. This dissertation examines the takeover and divestiture activity in high-tech markets in an effort to extend our current knowledge regarding high-tech companies. In that context, various firm characteristics and their relation to firm performance are investigated. Furthermore, an attempt is made to examine the role of investment banks and their impact---if any---on shareholder wealth. This study finds that for domestic high-tech acquisitions, the higher the level of the target's R&D expenditures, the lower the bidder's announcement period wealth effects. Furthermore, the more MEDIA attention the tech target receives prior to the acquisition the more favorably investors react to news about the acquisition. This finding is common both for domestic and international tech acquisitions. Findings on the role of investment bank advisors vary across the three studies. Essay 1 shows that high-tech acquisitions advised by top-tier investment banks perform worse upon announcement than acquisitions advised by lower-tier investment banks. In Essay 2 the tier of the investment bank advisor makes a difference only during the difficult and uncertain years of the tech downturn time period. Finally, in Essay 3 it is found that sellers benefit from the presence of an investment bank advising the buyer, suggesting that whenever the buyer uses an investment bank, the assets are divested at a high price. However, it is only during the years following the end of the tech-bubble period that buying-firm shareholders reacted less favorably to acquisitions of high-tech divested assets certified by an investment bank.