Does environmental, social and governance performance affect acquisition premium?

IF 3.2 Q2 BUSINESS

Review of International Business and Strategy Pub Date : 2024-05-16 DOI:10.1108/ribs-07-2023-0076

Mouna Zrigui, Imen Khanchel, Naima Lassoued

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Abstract

Purpose From a target perspective, this paper aims to examine the impact of environmental, social and governance (ESG) performance on mergers and acquisitions (M&A) transaction valuations. Design/methodology/approach This paper uses a sample of 629 international transactions conducted between 2002 and 2020. Ordinary least squares (OLS) regression was applied by using ESG aggregate score and the three ESG pillars: environment, social and governance. Findings This paper finds that the ESG performance of targets has a negative and significant impact on acquisition premiums. However, this paper finds that targets receive lower premiums by increasing their ESG score, suggesting that targets would do better to focus on ESG to increase shareholder wealth. Thus, results of this paper support the view that ESG-focused firms create shareholder value through the M&A process. Furthermore, results of this paper indicate that environmental and social aspects of ESG drive the acquisition premium. The governance score does not seem to be related to acquisition premiums. Originality/value To the best of the authors’ knowledge, this study is the first study to assess whether ESG performance impacts the valuation of M&A transactions by decomposing ESG into its three components.

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环境、社会和治理绩效是否会影响收购溢价？

目的本文旨在从目标公司的角度研究环境、社会和治理（ESG）绩效对并购（M&A）交易估值的影响。采用 ESG 总分和环境、社会和治理三大 ESG 支柱进行普通最小二乘法（OLS）回归。研究结果本文发现，目标公司的 ESG 表现对并购溢价有显著的负面影响。然而，本文发现，目标公司通过提高 ESG 分数获得的溢价较低，这表明目标公司最好关注 ESG 以增加股东财富。因此，本文的研究结果支持了关注 ESG 的公司通过并购过程创造股东价值的观点。此外，本文的结果表明，环境、社会和公司治理的环境和社会方面推动了收购溢价。原创性/价值据作者所知，本研究是第一项通过将 ESG 分解为三个组成部分来评估 ESG 表现是否影响并购交易估值的研究。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of International Business and Strategy BUSINESS-

CiteScore

6.90

自引率

25.80%

发文量

期刊介绍： Review of International Business and Strategy is keen to present contemporary and innovative research that proposes new perspectives or challenges existing theories, and that advances the understanding of issues related to international business and global strategy. Themes covered by the journal include (but are not limited to): Internationalization of firms and international entrepreneurship Effects of international environment (political, social, economic and institutional) on international business activities and firm strategies Knowledge transfer strategies and innovation in MNEs Location strategies in international business activities.