When do alliance partners become attractive targets?

Technology acquisition motive is a very important determinant of firm acquisition. Acquisitions enable firms to: 1) reduce the lead-time for obtaining the desired new technology; 2) to capture the complementary tacit resources settled behind the new development; 3) and to utilize fully the accumulated knowledge possessed by the acquired firm. Our paper differs from yet complements this literature that models acquisition and alliances as essentially options to acquire partner firm assets and suggest that both mechanisms have to be considered related and, thus, worthy of study collectively. To test our hypotheses, we selected a sample of 316 biotech firms (283 US and 33 EU) from the Bioscan database, involved in 2,359 technology licensing agreements and 77 acquisition, spanning a period of 15 years