Resource and Skill Transfers in Subcontractor SME Acquisitions: Influence on the Long-Term Performance of Acquired Firms Véronique Favre-Bonté and Catherine Thévenard-Puthod IREGE, Université de Savoie, Annecy-le-Vieux, France This paper investigates the link between resource and skill transfers and the long-term performance of acqui- sitions. Rather than taking the more common acquirer’s perspective, this research emphasizes the point of view of the acquired firm and focuses on a little-studied type of business, namely, small and medium-sized subcontractor firms. Through 14 case studies of subcontractor acquisitions, we show that those acquired firms can improve their long-term performance in terms of turnover, profitability, number of employees and reduced dependency, if they receive certain types of new resources and skills from acquirers. Particularly, post-acquisition performance is more closely related to the transfer of managerial and functional skills than to operational resources. Three factors (e.g., geographical, business and cultural proximity) also help facilitate some types of transfers. However, the degree of post-acquisition integration does not play a key role in those transfers. Keywords: acquisition; resource transfer; skill transfer; small and medium-sized enterprises; subcontractors; performance Introduction Acquisition performance is a recurrent theme in stra- tegic management research (Zollo and Meier, 2008; Haleblian et al., 2009). Yet most studies examine the acquirer’s point of view or combine both firms’ perspec- tives (Capron and Hulland, 1999; Ahuja and Katila, 2001; Capron and Pistre, 2002; Cloodt et al., 2006); the acquirer’s perspective may seem more important, in the sense that being acquired is a signal of weakness or failure (Graebner and Eisenhardt, 2004). Although research has considered a firm’s capacity to choose whether and by whom it will be acquired (Graebner, 2004; Graebner and Eisenhardt, 2004; Dalziel, 2008), few studies have explored the acquired firm’s side of the story (Bandick and Görg, 2010). However, acquirer and acquired firms may differ in their assessments of acqui- sition performance, such that ‘one party could consider an acquisition successful while the other views it as disappointing’ (Graebner et al., 2010: 77). For example, owners who sell their companies are often concerned about their longevity, especially when the companies are family-owned, small and medium-sized enterprises (SMEs). To preserve their employees’ jobs, maintain the know-how and culture of their firm, and nurture good relationships with customers and suppliers (Uzzi, 1997; Dalziel, 2008), they tend to choose an acquirer carefully (Kets de Vries, 1988) and attend to the performance of the firm even after its acquisition (Graebner et al., 2010). The long-term performance of acquired firms has also become a major concern of public institutions in many Western countries, because the demographics of owner- managers 1 and the relatively high failure rate of acqui- sitions raise both economic and social issues (Calogirou et al., 2011). Even when a selling firm no longer exists as an independent legal entity, it can still be analysed as an acquired unit, especially if its post-acquisition integra- tion into the acquirer is low and it retains a high level of autonomy. In such a scenario, we could appraise acquisition performance in terms of the long-term Correspondence: Catherine Thévenard-Puthod, IREGE, Université de Savoie, chemin de Bellevue, BP 80439, 74944 Annecy-le-Vieux Cedex, France. E-mail: catherine.puthod@univ-savoie.fr 1 Each year, business transfers in the EU 27 due to the age of firm owners affect 450,000 firms and 2,000,000 employees (Calogirou et al., 2011). European Management Review, Vol. 10, 117–135 (2013) DOI: 10.1111/emre.12014 © 2013 European Academy of Management