Determinants of M&A Performance for High-Tech Companies in Developed Capital Markets

This study focuses on determinants of M&A performance for high-tech companies in developed capital markets. Using a sample of 110 mergers and acquisitions performed by companies from three major high-tech sectors in Europe between 2010 and 2016, we examine the influence of key micro and macro determinants on cumulative abnormal returns of the acquirer. We find that the size of the acquired knowledge base and the level of innovative development of the target’s country have negative impact on M&A performance, which we believe is due to highly disruptive integration process associated with acquisition of sophisticated technology. We also find support for the hypothesis that companies play major role in technological progress which explains negative relationship between high R&D expenses of the acquirer’s country and M&A performance. In accordance with prior research we find that the number of researchers in R&D on a country level increases M&A performance for high-tech companies.