Environmental Performance of Food and Beverage Firms in Merger and Acquisition Deals

Eng Li Li () and Mahelet Fikru ()
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Eng Li Li: Department of Business and Information Technology, Missouri University of Science and Technology, 301 West 14th Street, Rolla, MO65409, United States of America

Journal of Agricultural & Food Industrial Organization, 2020, vol. 18, issue 2, 19

Abstract: We build upon existing theories of merger and acquisition (M&A) to examine the differences in environmental performance between targets and acquirers in the Food and Beverage processing (F&B) industry. In a cream-skimming strategy, acquiring a firm with better environmental performance may add to the acquirer’s existing green efforts and improve their environmental capabilities. In a turnaround strategy, an acquirer may buy businesses from a dirtier firm and later bring them up to the buyer’s environmental standard. Among a set of 13 M&A deals in the F&B industry, we identify deals where targets have poorer or better environmental performance (toxic chemical management) than their acquirers. Our finding suggests that, among the given set of firms, there is some evidence of improvements in the toxic chemical management rate of targets and acquirers.

Keywords: cream-skimming strategy; environmental performance indicators; toxic chemical management; Toxics Release Inventory (TRI); turnaround strategy (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1515/jafio-2017-0037

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