Value Creation Following Merger and Acquisition Announcements: The Role of Strategic Emphasis Alignment

The purpose of this article is to investigate how strategic emphases of merging firms (marketing or research and development) create value in a merger context. The authors suggest that strategic emphasis alignment—the extent to which the resource configurations of acquirer and target firms are similar to or distinct from one another—is a key construct that facilitates value creation. Using data on abnormal stock returns, the authors also suggest that when merging firms have low strategic emphasis alignment, value is enhanced when the merger motive is diversification. In contrast, when merging firms have high strategic emphasis alignment, value is enhanced when the merger motive is consolidation.