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.
- Firm organization and market structure
- Horizontal anticompetitive practices
- Corporate governance