Authors: Georgios Patsiolas, Ioannis Tsakalos

Title: Does policy affect the impact of ESG on M&As? UK evidence after the BREXIT Referendum in domestic and cross border deals.

Abstract

The purpose of our study is to evaluate the impact of the UK’s EU membership referendum on mergers and acquisitions (M&As) and especially on the role of ESG score. We perform an  event study in order to measure cumulative abnormal returns during the post-referendum announcement period. First, the results indicate that higher  ESG score a company has, the lower  lower bid premium intents to pay. Moreover,  our paper shows that there is a stronger impact of ESG after the BREXIT completion and a stronger impact of ESG in cross border deals, compared to the results of the total sample. Finally, we observe that abnormal return variable is positive and statistically significant when an acquirer announce a Merger or Acquisition deal.  Our results show robustness in various tests and different proxies.