Long-term performance of technology acquisitions: The role of acquisition program diversity, innovation, and alliance portfolio size - Evidence from the pharmaceutical industry

This study investigates whether serial acquisitions enhance shareholder value in the context of technology acquisitions. We analyze how acquisition program diversity - defined as differences between multiple targets' firm types - affects long-term acquisition performance and examine how this relationship is contingent on strategic resources. By testing data regarding 312 technology acquisitions by 147 public pharmaceutical companies from 2002 to 2021, we find that the effect of acquisition program diversity on shareholder value follows an inverted Ushaped curve moderated by the acquirers' innovation level and alliance portfolio size. Our findings indicate that the performance of technology acquisitions depends on the acquiring firms' diversification degree regarding the industry value chain and internal and external resources relevant to corporate development strategies.