Building and Blocking : The Two Faces of Technology Acquisition


Grimpe, Christoph ; Hussinger, Katrin


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URL: http://ub-madoc.bib.uni-mannheim.de/2041
URN: urn:nbn:de:bsz:180-madoc-20410
Document Type: Working paper
Year of publication: 2008
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: G34 L20 O34 ,
Subject headings (SWD): Unternehmenskauf , Mergers and Acquisitions , Wissenschaftstransfer , Patent , Wettbewerbsbeschränkung , Unternehmensbewertung , Europäische Union
Keywords (English): Firm acquisitions , technology , patents , blocking patents
Abstract: 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 1999 to 2003 indicates that the price paid by an acquirer for a target increases with the patent stock, the relatedness, the value and the blocking potential of the target’s patents, especially if blocking patents are in technology fields related to the acquiring firm’s patent portfolio. Our results have implications for competition authorities, in that M&A transactions may considerably impact technology markets. This would also need to be reflected in the management’s technology strategy.
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Grimpe, Christoph ; Hussinger, Katrin (2008) Building and Blocking : The Two Faces of Technology Acquisition. Open Access [Working paper]
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