Abstract
Acquisition-based dynamic capabilities have become well established as a new imperative for organizing mergers and acquisitions (M&A) processes. However, understanding the full benefits and possible limits of real options applications to measure a dynamic capability-based synergy in M&A deals remains a challenge. This paper draws on real options theory to explore some of these benefits and limits to value a synergy in two highly strategic M&A deals. More specifically, the author develops the proposition that justifies the role of dynamic capabilities as antecedents of the success of M&A deals in the information and communications technology industry and demonstrates real options application to measure M&A synergies.
Highlights
The paper argues that the intersection of the framework of dynamic capabilities and real options theory can shed light on the antecedents of successes of mergers and acquisitions (M&A) deals in the information and communications technology (ICT) industry
What do two global ICT industry leaders, namely, Microsoft and Amazon hope to gain with those mergers? This paper demonstrates originality by analyzing antecedents of acquisitions giants through the lenses of dynamic capabilities framework, building blocks of business models, and consequences of acquisitions through the lenses of real options theory
Dynamic capabilities-based synergies provided by the degree of their similarities, complementarity, and transferability in M&A deals can be valued by real options application using the Black–Scholes Option Pricing Model (BSOPM) and Binominal Option Pricing Model (BOPM)
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. The objective of this article is to explore the antecedents of the dynamic capabilitiesbased synergies in mergers and acquisitions (M&A) deals and to demonstrate an application of real options to measure those synergies. The paper argues that the intersection of the framework of dynamic capabilities and real options theory can shed light on the antecedents of successes (synergies) of M&A deals in the information and communications technology (ICT) industry. The paper develops a proposition as follows. Dynamic capabilities-based synergies in M&A deals provided by the degree of their similarities, complementarity, and transferability can be valued by real options application using the Black–Scholes Option Pricing. Model (BSOPM) and Binominal Option Pricing Model (BOPM)
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