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When collaborative strategy turns into acquisition: Distinguishing and explaining partner acquisition versus joint venture buyout

Research output: Chapter in Book/Report/Conference proceedingChapter

In this chapter, we define the concepts of joint venture buyout and partner acquisition; explain the differences between the two; discuss their respective motivations and antecedents; and elaborate implications of this distinction for research and practice. Extract: "What comes after an alliance between two firms? The alliance may be dissolved and its activities stopped, effectively ending the relationship between the parent firms; another alliance may be formed to replace it; or the activities of the ex-alliance may continue but under the ownership and control of a single parent. Intriguingly, in the case of JVs this latter outcome may result from two developments. The first, which we refer to as a joint venture buyout (JVB), occurs when one parent firm takes over the shares that the other parent owned in their JV (Meschi, 2005; Zollo & Reuer, 2010). The second, which we refer to as a partner acquisition (PA), occurs when one partner acquires the other parent firm (Folta & Miller, 2002; Zaheer, Hernandez, & Banerjee, 2010).The two developments differ in what equity is being transacted. A JVB involves a change in ownership of one parent’s share of the JV’s equity, but does not affect either parents’ own equity. A PA involves acquisition of one parent by the other, so what is being transacted is one parent’s own equity. However, following a PA the acquiring parent also becomes sole owner of the alliance (Hagedoorn & Sadowski, 1999; Porrini, 2004)." (80)
Original languageEnglish
Title of host publicationCollaborative Strategy
Subtitle of host publicationA Guide to Strategic Alliances
EditorsL.F. Mesquita, R. Ragozzino, J.J. Reuer
Place of PublicationCheltenham, UK
PublisherEdward Elgar
Number of pages8
ISBN (Print)9781783479573
StatePublished - Apr 2017
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