The performance of technological acquisitions depends on the overlap between the knowledge bases of the target and acquiring firms. We argue this overlap is best viewed as two distinct constructs: target overlap, the proportion of the target’s knowledge the acquirer possesses, and acquirer overlap, the proportion of the acquirer’s knowledge duplicated by the target. Doing so simultaneously incorporates three drivers of value creation: acquirer’s absorptive capacity, knowledge redundancy, and organizational disruption due to conflict between the firms’ knowledge workers. Target and acquirer overlap have different, inter-related, effects on value created or lost from the target’s and acquirer’s technological capabilities. We also find that the low innovation quantity in acquisitions with low target overlap conceals an offsetting increase in the novelty and quality of innovations generated.