High-tech acquisitions by low-tech firms: Does acquirer experience count?

We study whether experience matters for acquirers in non-tech sectors when conducting acquisitions of high-tech targets. The topic is motivated by the rapid development of advanced and digital technologies that has fuelled tech-related M&A volumes, where companies seek high-tech targets to substitute or complement their own R&D and to stay competitive. Studying 1146 tech-oriented deals announced by European acquirers during the period of 2006-2019, we find the acquirer investors to be clearly optimistic about such takeovers, with positive and significant two-day cumulative abnormal returns of 0,82%. We also find that industrial acquirers seem to gain substantially. Lastly, one-time buyers were found to experience significantly higher cumulative abnormal returns than frequent buyers, and frequent buyers to exhibit a weak declining return pattern in subsequent deals. This implies that companies get rewarded for acquiring digital technology, and especially so in their first initiative to digitalize their business.Peer reviewe