In-depth interviews of dyads in cross border acquisitions of UK biotechs. Interviews took place in 2011 with key decision makers in the target firms and acquiring firms. Data was gathered from the target firms on their proprietary technology, their capabilities and the motivation for the sale of the company. Data was gathered from the acquiring firms on their proprietary technology and similarity or dissimilarity with the target, their capabilities, the motivation for acquiring the target firm and their strategic intentions with the technology and resources from the target firm. The UK through its research councils and charity organisations invests heavily in sustaining a strong science base, which is second only to the US in sectors such as medical and life sciences, mathematics and physics. Nevertheless, the UK faces challenges in the ability to commercialise science. Britain has low R and D outside a few leading firms and a large proportion of R and D funded by foreign firms. Part of the problem is the 'funding gap' that British firms face at various stages of development, which is a serious impediment to realising the economic potential of publicly-funded science. This funding gap differs among high-tech industries. In biotechnology, the gap is in late-stage funding, making UK biotech firms attractive acquisition targets for foreign firms. While there is much speculation about the funding gap, little is known about the effects of this funding gap on innovation. This research aims to understand what happens to the technological resources and assets of British science-based firms when acquired by foreign firms. Drawing on multiple case studies in Cambridge, Manchester and Oxford, the study derives different patterns of knowledge base combinations through acquisition that have different outcomes regarding innovation and important effects for the local science and technology system.

The data was gathered primarily through on-site in-depth interviews with founders, chief scientist and senior managers of the sampled firms for 6 cases, both target UK firms and acquiring foreign firms. We also used patent data pertaining to the sample firms and publicity material from press releases and web sites. The main units studied are firms involved in cross-border merger and acquisitions. We have 11 cross-border merger and acquisitions, of which we study seven of them in dyad pairs (the acquirer and the target firm). We used six cases to discuss findings. Selected firms were based on a list of UK biotech firms that had been acquired by foreign firms in the 2008-2010 time frame. Three additional interviews were held with other target firms but not included in the case studies.