The Importance of Target Firm Customers in Acquisitions of Technology-Based Firms

Abstract

In acquisitions of technology-based firms the focus is typically on the technology and the target firm's engineers and scientists. But a firm is a social entity with a range of important internal and external relationships that are essential to the exploitation of existing capabilities, and the development of new ones. These relationships need to be maintained, subsequent to acquisition, to preserve the target firm's ability to innovate and compete. I argue for the importance of the target firm's relationships with its customers, and show that the degree to which the acquisition creates or destroys value for the target firm's customers is a significant predictor of acquisition success.

Citation

Dalziel, M. (2007), "The Importance of Target Firm Customers in Acquisitions of Technology-Based Firms", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 6), Emerald Group Publishing Limited, Leeds, pp. 157-170. https://doi.org/10.1016/S1479-361X(07)06007-3