Investigating ESG-influenced Mergers and Acquisitions

Abstract

This research examines the effects of ESG-influenced mergers and acquisitions (M&A) deals in the United States from 2016-2020. This paper provided a start-to-end overview of ESG-influenced M&A deals by determining the type of acquirer that conduct ESG-influenced M&A deals, the investors reaction towards the deals, and finally the post-merger ESG effects of the deals. The result shows that high acquirers are more likely to conduct ESG-influenced M&A deals, however low acquirers receive a better reaction from investors which supports that they have signalled their sustainability efforts and low acquirers have an increase in post-merger ESG performance, disproving the greenwashing theory and supporting the legitimacy theory.