Building and Blocking: The Two Faces of Technology Acquisition

Arbeitspapier

Gaining access to technological assets and patents, in particular, has long been a major motive and objective for firm acquisitions. On the one hand, patents are used as a building instrument for the acquirer's technology portfolio. On the other hand, patents can be attractive because of their strategic value as a bargaining chip, e.g. in licensing negotiations. This is especially the case if patents have the potential to block competitors. Drawing on transaction cost economics and the resource-based view of the firm, we analyze the importance of these two faces of technology acquisition for the valuation of a target firm. Empirical evidence for European firm acquisitions in the period from 1996 to 2003 indicates that the price paid by an acquirer for a target increases with the building and blocking potential of the target's patents, especially if building and blocking patents are in technology fields related to the acquiring firm's patent portfolio. Our results have implications for the technology strategy of the firm, in that M&A transactions may considerably impact technology markets, increasing the concentration of key technologies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 08-042 [rev.]

Classification and Topics

• Classification: Wirtschaft ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Firm Objectives, Organization, and Behavior: General ; Intellectual Property and Intellectual Capital
• Subject: Firm acquisitions ; technology ; building patents ; blocking patents ; Übernahme ; Wissenstransfer ; Patent ; Wettbewerbsbeschränkung ; Unternehmenswert ; Technologie ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grimpe, Christoph ; Hussinger, Katrin
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/27588
• Last update: 10.03.2025, 11:42 AM CET