The Impact of Mergers and Acquisitions and Sustainability on Company Performance in the Pharmaceutical Sector

Diana Marieta Mihaiu, Radu-Alexandru Șerban, Alin Opreana, Mihai Țichindelean, Vasile Brătian and Liliana Barbu
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Diana Marieta Mihaiu: Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Radu-Alexandru Șerban: Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Alin Opreana: Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Mihai Țichindelean: Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Vasile Brătian: Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania
Liliana Barbu: Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania

Sustainability, 2021, vol. 13, issue 12, 1-24

Abstract: The primary goal of this study was to determine the impact of mergers and acquisitions (M&A) and the environmental, social, and governance (ESG) sustainability scores of companies. In this regard, efforts to measure and analyze the evolution of a company’s performance, taking into account financial and non-financial measures using a score function, are adapted to the pharmaceutical sector. The sample consisted of 100 leading pharmaceutical companies, ranked by stock market capitalization, who registered 30% ( n = 492) of the total M&A transactions over the study period (2010–2020). There was a direct and positive link between the M&A process and the evolution of company performance. The ESG score, as an indicator for measuring sustainability, has a positive and direct impact on company performance, indicating that a high ESG score determines an increase in company performance. A similar impact is identified for companies involved in M&A processes, meaning that companies in the pharmaceutical sector tend to register a performance improvement.

Keywords: M&A; sustainability; company performance; performance score; pharmaceutical sector (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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