Market and technology access through firm acquisitions: Beyond one size fits all

Purpose – Firm acquisitions have been shown to serve as a way to gain access to international markets, technological assets, products or other valuable resources of the target firm. Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we show whether and how the importance of different takeover motivations changes along the deal value distribution. Methodology/approach – On the basis of a comprehensive dataset of 652 European mergers and acquisitions in the period from 1997 to 2003, we use quantile regressions to decompose the deal value at different points of its distribution. Findings – Our results indicate that the importance of technological assets is higher for smaller target firms while the importance of non-technological assets seems to be higher for larger targets. The findings support the view on small acquisition targets to complement the acquirer's technology portfolio while larger acquisition targets tend to be used to gain access to international markets. Research limitations/implications (if applicable) – Our findings suggest that the average firm as a reference for study might not be appropriate to address as the size of the target firm influences the value attribution to the target's assets. Practical implications (if applicable) – Managers in the acquiring firm should be aware that they might overpay for the technological assets of a small firm. However, the acquisition of larger targets requires a well-developed integration strategy. Originality/value of paper – For the first time, the broad merger motive of technology acquisition has been further qualified according to the size of the target which exhibits a considerable impact.