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

Tampakoudis, Ioannis; Anagnostopoulou, Evgenia

doi:10.1002/bse.2475

Cited by 76 publications

(61 citation statements)

References 55 publications

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“…The aforementioned hypothesis is then in line with recent evidence according to which the stock market recognizes value creation when acquirers take over a target company with a higher sustainability performance (Bettinazzi & Zollo, 2017;Cho et al, 2020;Tampakoudis & Anagnostopoulou, 2020).…”

Section: Research Hypothesessupporting

confidence: 82%

Detangling the role of environmental, social, and governance factors on M&A performance

Teti

Dell’Acqua

Bonsi

2022

Corp Soc Responsibility Env

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We empirically investigate the different role the environmental, social, and governance (ESG) factors play on Mergers and Acquisitions (M&A) performance. In general, our results confirm that acquiring companies have a benefit if they acquire a target with a higher ESG score, in line with recent evidence. But have the single ESG factors the same impact in the value appreciation by financial markets? To answer this question, we detangle the single effects of the ESG factors and we show that, on a standalone basis, a superior social commitment and a higher environmental score are not relevant for M&A value creation, whereas better corporate governance standards affect positively the takeover performance. The analysis of residuals and the Q-Q plot confirm the robustness of our empirical results which open new research routes for the investigation of the differential role that ESG factors may have in guiding corporate decisions towards M&A transactions capable of value creation.

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Section: Research Hypothesessupporting

confidence: 82%

Detangling the role of environmental, social, and governance factors on M&A performance

Teti

Dell’Acqua

Bonsi

2022

Corp Soc Responsibility Env

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“…The results also show that firms that acquired SRI-aware targets managed to improve their social and environmental performance, suggesting the ability of acquirers to learn from the targets’ SRI activities and practices. Other studies investigate the effects of ESG corporate performance on various M&A outcomes such as acquisition premiums (Gomes and Marsat, 2018; Qiao and Wu, 2019), target selection and screening process (Gomes, 2019), target valuation (Chen and Gavious, 2015), deal-related uncertainty (Arouri et al , 2019), the level of investment in mergers (Krishnamurti et al , 2020), the potential for a firm to become either a target or an acquirer (Boone and Uysal, 2020) and the post-merger market valuation (Tampakoudis and Anagnostopoulou, 2020).…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

The effect of ESG on value creation from mergers and acquisitions. What changed during the COVID-19 pandemic?

Tampakoudis

Noulas

Kiosses

et al. 2021

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Purpose The purpose of this study is to investigate the relationship between environmental, social and governance (ESG) performance and shareholder wealth in the context of mergers and acquisitions (M&As) before and during the coronavirus (COVID-19) pandemic. Design/methodology/approach This paper uses a sample of 889 completed M&As announced by US firms between 1 January 2018 and 31 July 2020. Announcement abnormal returns are estimated using an event study methodology and the relation of ESG performance to shareholder value creation is tested with univariate and multivariate cross-sectional regressions. Findings This study provides evidence for a significant negative value effect of ESG performance for the shareholders of acquiring firms during the entire sample period. The negative effect appears to be stronger, as the onset of the COVID-19 crisis. This suggests that, during the pandemic-driven economic turmoil, the costs of sustainability activities outweigh any possible gains, providing evidence in support of the overinvestment hypothesis. Research limitations/implications The results of the study have important implications for firms, investors and policymakers. Firms should be more cautious with regard to extensive investments in ESG activities, particularly during economic turmoil. For shareholders, the results suggest that ESG engagement is not a resilience factor in an exogenous shock such as the COVID-19 pandemic. In terms of policymaking, the sustainability disclosure framework should remain voluntary allowing firms to report material ESG-related issues. The main limitation of the study is related to data availability regarding ESG performance. Originality/value To the best of the knowledge, this is the first study that investigates the effect of ESG performance on shareholder value in the market for corporate control before and during the COVID-19 pandemic.

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“…Alexander et al (2014) focus on appraisal rights, fair value, duties and limitations in the sales of B Corps. There are also contributions on M&A and CSR, but these do not consider the specificities of the Certified B Corp business model (Arouri et al, 2019; Cho et al, 2021; Gomes, 2019; Meckl & Theuerkorn, 2015; Tampakoudis & Anagnostopoulou, 2020; Zhang et al, 2019).…”

Section: B Corp and Manda: A Literature Reviewmentioning

confidence: 99%

Culture and sustainable development: The role of merger and acquisition in Italian B Corps

Gazzola

Amelio

Grechi

et al. 2022

Corp Soc Responsibility Env

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The aim of this study is to describe and analyse the relationship between the phenomenon of B Corp and M&A operations carried out by these companies. Italy is the second country at the international level and the first country at the European level to have been particularly active in this direction (Law n.208/2015). Therefore, a questionnaire was developed and sent to the certified Italian B Corps. The medium-long-term vision emerged in particular, and the values that guide these companies are ethics, sustainability and transparency. These are aspects that particularly characterise the ideals, identity and culture of B Corps, which are also involved in social and environmental issues. The research shows how corporate culture influences these companies from a merger and acquisition perspective. Cultural compatibility is important, as it allows the companies to operate according to common or similar visions regarding certain aspects that other companies probably find less important.

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

Cited by 76 publications

References 55 publications

Detangling the role of environmental, social, and governance factors on M&A performance

Detangling the role of environmental, social, and governance factors on M&A performance

The effect of ESG on value creation from mergers and acquisitions. What changed during the COVID-19 pandemic?

Culture and sustainable development: The role of merger and acquisition in Italian B Corps

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