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R&D intensive acquisitions and the best asset owner principle

Rintanen, Tatu Topias LU and Leise, Linus LU (2021) BUSN79 20211
Department of Business Administration
Abstract
We study the impact of research and development (R&D) intensity on acquisitions in R&D intensive industries. First, we look at the impact of target R&D intensity on acquirer return to see if it is affected by acquisition premiums. Second, we study the impact of target R&D intensity relative to acquirer R&D intensity and look at whether this impact is affected when the companies have similar operations. Finally, we study valuable asset combinations by estimating the impact of target R&D intensity on acquirer abnormal return for different levels of acquirer selling, general and administration (SG&A) intensity. Target R&D intensity does not seem to have a statistically significant impact on acquirer return in our sample, even at different... (More)
We study the impact of research and development (R&D) intensity on acquisitions in R&D intensive industries. First, we look at the impact of target R&D intensity on acquirer return to see if it is affected by acquisition premiums. Second, we study the impact of target R&D intensity relative to acquirer R&D intensity and look at whether this impact is affected when the companies have similar operations. Finally, we study valuable asset combinations by estimating the impact of target R&D intensity on acquirer abnormal return for different levels of acquirer selling, general and administration (SG&A) intensity. Target R&D intensity does not seem to have a statistically significant impact on acquirer return in our sample, even at different levels of acquisition premiums. The relative R&D intensity does not seem to have any statistically significant impact on acquirer return, but the impact increases when the companies are strategically related. The positive impact of target R&D on acquirer abnormal return increases significantly with higher acquirer SG&A. (Less)
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author
Rintanen, Tatu Topias LU and Leise, Linus LU
supervisor
organization
course
BUSN79 20211
year
type
H1 - Master's Degree (One Year)
subject
keywords
M&A, Abnormal returns, R&D intensity, Value creation, U.S. market
language
English
id
9061244
date added to LUP
2021-09-08 14:15:10
date last changed
2021-09-08 14:15:10
@misc{9061244,
  abstract     = {{We study the impact of research and development (R&D) intensity on acquisitions in R&D intensive industries. First, we look at the impact of target R&D intensity on acquirer return to see if it is affected by acquisition premiums. Second, we study the impact of target R&D intensity relative to acquirer R&D intensity and look at whether this impact is affected when the companies have similar operations. Finally, we study valuable asset combinations by estimating the impact of target R&D intensity on acquirer abnormal return for different levels of acquirer selling, general and administration (SG&A) intensity. Target R&D intensity does not seem to have a statistically significant impact on acquirer return in our sample, even at different levels of acquisition premiums. The relative R&D intensity does not seem to have any statistically significant impact on acquirer return, but the impact increases when the companies are strategically related. The positive impact of target R&D on acquirer abnormal return increases significantly with higher acquirer SG&A.}},
  author       = {{Rintanen, Tatu Topias and Leise, Linus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{R&D intensive acquisitions and the best asset owner principle}},
  year         = {{2021}},
}