Does Sustainability Matter? Analysis of the Impact of Corporate Sustainability on Financial Markets in the Context of Acquisitions

Sammanfattning: The concept of sustainable investing has gained importance in recent years, considering the growing share of sustainable investments compared to the total volume of global investments. The rise of sustainable investment has not only led to changes on the part of investors, but also to changes of a strategic nature on the part of companies. In this context, Green Mergers and Acquisitions represent a new strategic tool, whereby companies selectively acquire target companies with excellent sustainability standards. This study therefore examines the extent to which the concept of corporate sustainability is valued in the financial markets through green mergers and acquisitions by investigating whether such acquisitions generate short-term shareholder wealth. Furthermore, the study examines which, if any, of the three sustainability dimensions, captured in the ESG framework, exert the greatest influence on shareholder wealth. The study is based on a quantitative approach, is deductive in nature and is based on the event study methodology. In addition, OLS multiple linear regression models were used to examine the relationship between the level of corporate sustainability of the target companies and the cumulative abnormal return. The results of the study reveal an existing correlation between the level of corporate sustainability of target companies and the shareholder wealth of the acquirers' shareholders. Furthermore, the results reveal that only the social dimension of the ESG framework has a significant positive impact on shareholder wealth, whereas the remaining two dimensions do not have a significant impact.