Sustainability in M&A: Empirical Findings on the Effect of ESG Scores on M&A Performance
Keywords
Loading...
Authors
Issue Date
2025-07-04
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
This study investigates the short- and long-term impact of ESG scores on M&A performance across listed companies in the United States and Europe. Utilizing event study methodology and OLS regression analysis with various control variables, the research examines the influence of acquirer ESG, target ESG, and their interaction on cumulative abnormal returns surrounding deal announcements, post-merger return on assets, and bid premiums spanning from 2002 to 2024. It is hypothesized that higher ESG scores of both acquirers and targets, as well as their interaction, positively influence M&A performance and deal valuation. The results show no significant association between ESG and cumulative abnormal returns but reveal that higher ESG scores for both acquirers and targets are positively related to the bid premium, with a significant negative interaction effect. For the return on assets ratio, limited evidence suggests a positive link between the acquirer and target ESG. The findings contribute to a deeper understanding of how ESG characteristics influence M&A outcomes and have implications for corporate strategic decision-making, investor valuation, and academic research on sustainable finance.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen