Post-acquisition integration strategic choices: Do inherited Alliances play a role? - 25 May 2019

About the seminar

While prior research has acknowledged that acquiring firms consider the in-house resources and capabilities of acquired firms when making decisions regarding their integration, it has ignored the possibility that some acquired firms might have access to shared resources and capabilities through their strategic alliances. We refer to an acquired firm’s alliances as inherited alliances. We posit that the value-disruption risks in acquisitions that include many inherited alliances are greater than in acquisitions that do not include such partnerships.

Therefore, we expect a preservation strategy to become more likely when the number of inherited alliances in an acquisition is high, and we propose that this relationship is moderated by the presence of an acquisition-preceding alliance between the acquiring and acquired firm.

Based on a sample of acquisitions in the biotechnology sector, we find support for both hypotheses. Our findings contribute to the post-acquisition integration literature by uncovering an important antecedent of integration decisions that lies beyond the internal boundaries of the acquired firms. Our findings also add to research at the intersection of alliances and acquisitions, as they indicate that there are unique interdependencies between alliances and acquisitions that shape organizational-level decision-making.

This seminar was organised in collaboration with the Stockholm School of Entrepreneurship.