The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers

Ioannis Tampakoudis; Evgenia Anagnostopoulou

doi:10.1002/bse.2475

journal article Jan 31, 2020

The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers

Ioannis Tampakoudis Evgenia Anagnostopoulou

Business Strategy and the Environment Vol. 29 No. 5 pp. 1865-1875 · Wiley

View at Publisher Save 10.1002/bse.2475

Abstract

AbstractThis 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.

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Metrics

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References

Details

Published: Jan 31, 2020
Vol/Issue: 29(5)
Pages: 1865-1875
License: View

Authors

I

Ioannis Tampakoudis

Department of Business Administration University of Macedonia Thessaloniki Greece

E

Evgenia Anagnostopoulou

Department of Business Administration University of Macedonia Thessaloniki Greece

Cite This Article

Ioannis Tampakoudis, Evgenia Anagnostopoulou (2020). The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers. Business Strategy and the Environment, 29(5), 1865-1875. https://doi.org/10.1002/bse.2475

The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers

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