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Exploring the effects of mergers and acquisitions on acquirers' sustainability orientation: Embedding, adding, or losing sustainability
Author(s) -
Vastola Vincenzo,
Russo Angeloantonio
Publication year - 2021
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2673
Subject(s) - sustainability , business , due diligence , stakeholder , shareholder , mergers and acquisitions , sustainability reporting , corporate sustainability , industrial organization , corporate governance , shareholder value , perspective (graphical) , flexibility (engineering) , marketing , economics , finance , management , ecology , artificial intelligence , computer science , biology
Mergers and acquisitions (M&A) have been primarily investigated from a shareholder‐centric perspective of economic value maximization. However, this type of strategic initiatives also carries relevant implications for companies' capacity to respond to increasing social and environmental concerns among their stakeholders. In this study, we explore the processes related to, and nonfinancial consequences of, acquisitions involving sustainability‐oriented firms. Leveraging interviews with business decision makers and secondary data covering the pre‐ and post‐acquisition phases, we find three main paths leading the acquiring firms to embed, add, or lose sustainability. Therefore, three possible post‐acquisition outcomes emerge, associated with differences in acquirers' focus on sustainability infusing the deal rationale, their due diligence activity, and practices of stakeholder management and integration in the post‐acquisition phase.