Can a previous alliance between an acquirer and a target affect acquisition performance?

Throughout the 1990s, organizations have been combining resources through acquisitions and alliances in record numbers. An acquirer's previous alliance with a target may give an acquirer target-specific information and experience that may be at advantage-producing resource in selection, valuation and integration of the target. This study investigates whether a previous alliance between an acquirer and a target affects post-acquisition performance and finds that a previous alliance between an acquirer and a target correlates positively with acquisition performance. Acquirers' previous R&D, technology transfer, manufacturing and marketing alliances with targets benefit acquisition performance more than their previous licensing alliances with targets. Furthermore, target-specific learning effects are strongest and most beneficial to acquisition performance in acquirers' previous technology transfer and manufacturing alliances with targets. (C) 2004 Elsevier Inc. All rights reserved.