embedded path of existing alliances and form new alliances with new partners. While new partners are mostly found through the …

Are divestitures only an ex-post reactive correction of past inefficient acquisitions or are they also an ex …-ante proactive strategy to enhance the value of future acquisitions? We find support for the latter. Firms engaging in divestitures … before making acquisitions obtain higher abnormal returns, especially in large acquisitions. These findings are not explained …