Abstract
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 targetwith a higher ESG score, in line with recent evidence. But have the single ESG factorsthe 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 notrelevant for M&A value creation, whereas better corporate governance standardsaffect positively the takeover performance. The analysis of residuals and the Q-Qplot confirm the robustness of our empirical results which open new research routesfor the investigation of the differential role that ESG factors may have in guiding corporate decisions towards M&A transactions capable of value creation.
Keywords
ESG factors, ESG performance, M&A value creation, stakeholder theory
