When Does Acquisition Experience Recency Matter?

The effects of acquisition experience on acquisition performance are inherently complex, and research results are mixed and highly debated. Prior research has found both positive, negative and on aggregated level insignificant effects of acquisition experience on acquirer performance. We develop and test how recent acquisition experience interacts with capabilities required during different phases of the acquisition process. Particularly, we focus on sensing in the pre-acquisition stage, seizing during deal completion, and transforming during integration. Using unique survey data from German mid-sized acquirers, our results show that recent acquisition experience interacts positively with capabilities that involve repetitive elements across different deals, such as deal completion and integration. However, it is detrimental during phases containing high degrees of novelty, such as sensing of opportunities. By identifying when recent acquisition experience is beneficial in combination with capabilities, our results reconcile conflicting research findings and demonstrate that the effect of acquisition experience is contextual.