Sustainability as a stumbling block in closing acquisitions? The joint effect of target and acquirer ESG performance on time to completion

Ruben Just, Friedrich Sommer, Tim Heubeck and Reinhard Meckl

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: Sustainability is currently a major concern in business and society. As environmental, social, and governance (ESG) aspects are also considered in acquisitions, e.g., through time-consuming ESG due diligences, we investigate whether differences in ESG performance delay the closing of acquisitions. Using a sample of global M&A transactions, we measure ESG performance using the Refinitiv Eikon ESG scores and time to completion (TTC) as the number of days between the announcement and closing of a transaction. Our results show that larger differences in ESG performance between acquirer and target lead to shorter TTC when acquirer ESG performance exceeds target ESG performance.

Keywords: ESG; M&A; Sustainability; Time to completion; Due diligence (search for similar items in EconPapers)
JEL-codes: D22 G34 M14 M41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007948

DOI: 10.1016/j.frl.2023.104422

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