Unraveling the Influence of CSR on M&A Decisions - The Effect of CSR on Target Choice and M&A Premiums

Abstract

This thesis examines the impact of Corporate Social Responsibility (CSR) on Merger and Acquisition (M&A) decisions. Specifically, the study assesses how CSR affects the selection of target companies and deal premiums. The analysis is based on a dataset of 333 transactions involving acquirers based in the United States, Canada, and Western Europe. The findings reveal that a higher CSR score for the acquiring company increases the likelihood of the target company having a higher CSR score, suggesting that the target’s CSR practices significantly influence the selection process. Additionally, the analysis reveals that the CSR score of the target company notably impacts the deal premium. Furthermore, when assessing the individual pillar score’s effect on the deal premium, it is found that only the governance pillar has a significant effect on the deal premium. Keywords: