Abstract
Prudent target choice is expected to affect performance of mergers and acquisitions. We conceptualize target choice as a rational anticipation of unique future gains from the specific combination of acquirer and target firms, considering sources of strategic synergy as well as factors affecting the ability to reap these synergies in the post-merger integration. Empirical work on target choice is sparse and often does not focus on the unique characteristics of bidder-target pairs. We investigate target choice criteria in the context of international horizontal mergers in the global mobile network operator industry from 1998 to 2009, taking potential acquirer-target dyads as a unit of analysis. We find that multinational mobile network operators look for similarities in targets with regard to their technological infrastructure and in a geographic dimension. We only find mixed evidence for our hypothesis that bidders look for targets with vertical boundaries similar to theirs.
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