Our study investigates how differences in perceptions between CEOs and shareholders about the synergistic benefits of technological acquisitions impact acquisition outcomes. We posit that acquisitions with high technological similarity or high technological complementarity command high premiums and receive positive market reactions, aligning with both CEOs’ and shareholders’ expectations for significant synergies. More notably, we suggest that when acquisitions exhibit both traits, CEOs, optimistic about the potential synergies and their realization, tend to offer highest premiums, whereas shareholders, wary of the integration complexities, show reserved reactions. Analysis of 528 U.S. technological acquisitions from 1986 to 2015 supports our theory, showing that while CEOs and shareholders both value potential synergies, they hold opposing views on the feasibility of achieving these in acquisitions where varied synergy sources coexist.
