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Title: The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers
Authors: Tampakoudis, Ioannis
Anagnostopoulou, Evgenia
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business::Finance
FRASCATI::Social sciences::Economics and Business::Business and Management
Issue Date: 31-Jan-2020
Publisher: Wiley
Source: Business Strategy and the Environment
Volume: 29
Issue: 5
First Page: 1865
Last Page: 1875
Abstract: This study explores the effect of environmental, social, and governance (ESG) performance on market value and performance in the context of mergers and acquisitions. We examine whether acquisition of targets with better ESG performance can help acquirers to increase their own ESG performance and whether the market values the increased ESG performance positively. Moreover, we explore whether the acquisition of targets with better ESG performance affects the market value of acquirers. For this study, we utilize a sample of 100 European mergers and acquisitions between 2003 and 2017, for which matching data on the ESG performance of both the target and acquiring firms are available. Our results show that the postmerger ESG performance of the acquirer increases following the acquisition of a target that has higher ESG performance than that of the acquirer in the premerger stage, whereas the postmerger market value of the acquirer increases following an increase in the acquirer's postmerger ESG performance in relation to its premerger ESG performance. Finally, we provide partial evidence of a positive relationship between the postmerger market value of the acquirer and the acquisition of a target with higher ESG performance than itself in the premerger stage.
ISSN: 0964-4733
Other Identifiers: 10.1002/bse.2475
Appears in Collections:Department of Business Administration

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