Literature has increasingly recognized that firms are deeply embedded in networks of social and economic relations. These include client-supplier relationships, trade association memberships, relationships among individual employees, interlocking directorates, and prior strategic alliances (e.g. Gulati 1998). Importantly, this network of relationships can considerably influence firms’ behavior (Uzzi 1996). The hypotheses developed in this chapter contend that this is true also for firms’ acquisition strategy, and in particular that the opportunity set perceived by firms active in the market for corporate control is affected in important ways by their bundle of social relations. More specifically, in this study we will focus on the network of strategic alliances. Two competing hypotheses concerning the effect of the network of alliances on merger and acquisition (M&A) decisions are developed and tested. First, we argue that proximity within the alliance network structure increases the probability that two firms will engage in a merger or acquisition because of the informational advantages provided by network proximity. Second, we contend that two firms that are closer in the network have a lower probability of merging compared to more distant or disconnected firms. The argument underlying this alternative prediction is that M&As and alliances are substitute inter-firm governance modes. It follows that the presence of a network of alliances may make an M&A unnecessary. We test these competing hypotheses on a sample of firms from the US semiconductor industry and find support for the informational advantage hypothesis.