Beginning Consolidation in the Renewable Energy Industry and Bidders’ M &amp;amp; A-Success

Eisenbach, S.; Ettenhuber, C.; Schiereck, Dirk; Flotow, Paschen von

doi:10.4236/ti.2011.22009

Cited by 7 publications

(7 citation statements)

References 42 publications

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“…Results are consistent with the prevailing literature in the field, suggesting that generic M&A deals destroy value for bidders (King et al, 2004;Zollo & Meier, 2008) while enforcing the notion that green deals, different from other deals, can foster bidders' value creation (Eisenbach et al, 2011;Yoo et al, 2001).…”

Section: Analysis Of Resultssupporting

confidence: 86%

“…how the new shift towards environmental responsibility affects M&A deals, since it is a relatively recent reality (Chan & Walter, 2014;Eisenbach et al, 2011;Lin & Wei, 2006;Yoo et al, 2011). The concept of business ethics has been studied in various fields of social sciences, as well as information management, marketing or human resources management but its impact on acquisition performance is still unclear among academics and practitioners.…”

Section: Literature Reviewmentioning

confidence: 99%

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Green M&A Deals and Bidders’ Value Creation: The Role of Sustainability in Post-Acquisition Performance

Salvi¹,

Petruzzella²,

Giakoumelou³

2018

IBR

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A transition to natural and renewable resources is deemed necessary to preserve the environment and satisfy future energy needs globally. In this context, green economy can be considered a viable alternative paradigm that preserves growth expectations while protecting the earth's ecosystems.The objective of this study is to investigate whether "green" acquisitions represent a suitable way to support the green economy's growth, given that public subsidies alone do not suffice. To this end, we analyse bidders' post-acquisition performance (return on assets), based on data from the most recent deals, and try to decode whether bidders that "green" themselves find the potential to improve their financial performance and simultaneously enhance their corporate image.Results confirm that bidders opting for "green" deals can obtain better financial outcomes compared to firms that perform deals in other sectors. This implies that firms may favor such transactions both to foster their external growth and obtain better operating and financial results, while attributing a green identity to their corporate image and protecting the environment. These findings bestow and elevate confidence in the potential of relevant research, raising focus on unexplored Mergers and Acquisitions (M&A) aspects of growing interest among investors worldwide.

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Section: Analysis Of Resultssupporting

confidence: 86%

Section: Literature Reviewmentioning

confidence: 99%

Green M&A Deals and Bidders’ Value Creation: The Role of Sustainability in Post-Acquisition Performance

Salvi¹,

Petruzzella²,

Giakoumelou³

2018

IBR

View full text Add to dashboard Cite

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“…While not nearly as much research has been conducted in this niche, the results mainly point to the opposite of M&A in general, i.e., green M&A leads to better M&A performance for the acquirer [62]. Specifically, Eisenbach et al [63] argued that acquirers receive positive abnormal returns when acquiring renewable energy enterprises. Also targeting the acquisition of renewable energy enterprises, Basse-Mama et al [64] and Yoo et al [65] further refined the differential impact of acquirer industry characteristics.…”

Section: Corporate Financializationmentioning

confidence: 99%

Can Green Mergers and Acquisitions Curb the Financialization of Heavily Polluting Enterprises? Evidence From China

Wang,

Zhao,

Zhu

2024

Pol. J. Environ. Stud.

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Realizing the harmonious coexistence of environmental and economic benefits is an inevitable requirement, and promoting the sustainable development of corporate environmental governance and physical enterprises "from virtual to real" is the essence. Using a sample of Chinese A-share listed heavily polluting enterprises from 2004 to 2020, the impact mechanism of green mergers and acquisitions (M&A) on corporate financialization is investigated through multiple regression analysis. The results show that green M&A can inhibit corporate financialization, with government environmental concerns playing a negative moderating role and corporate governance capabilities playing a positive moderating role. Further results on the transmission mechanism show that financing constraints mediate the relationship between green M&A and corporate financialization. The results of the study not only show that green M&A is a "sincere" behavior of enterprises to promote sustainable development, but also reveal the "dynamic" role of government environmental concerns and corporate governance capabilities. In addition, the "reservoir" effect of corporate financialization is also confirmed.

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“…To our best knowledge, there are no comprehensive studies analysing the characteristics and shareholder wealth effects of M&As involving renewable energy targets. This is due to the fact that the consolidation wave in the industry started relatively recently [45] and gained speed during the last decade. The current study attempts to fill the discovered research gap by collecting comprehensive empirical material related to this phenomenon.…”

Section: Rq3 What Are the Terms Of Mandas Involving Renewable Energy Companies Compared To Other Deals Completed By Vertically Integratedmentioning

confidence: 99%

Characteristics and Shareholder Wealth Effects of Mergers and Acquisitions Involving European Renewable Energy Companies

2021

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The present study documents a positive market reaction to mergers and acquisition (M&A) deals involving renewable energy companies. Acquirers record positive post-deal cumulative risk-adjusted returns upon taking over a renewable energy target, especially if the former also operates in the renewable energy sector. Such deals often involve purchases of majority equity stakes financed with acquirers’ stock rather than cash. Acquirers of renewable energy firms tend to be more profitable and cash-rich than their industry peers, yet they are less likely to be serial acquirers and channel cash reserves towards M&As. We evidence that the quality of corporate governance in the energy sector may play a substantial role in shaping the choice of targets; a director’s outside affiliations increase the likelihood of takeovers of non-energy firms, while the presence of outsiders on board appears to incentivize diversification into renewable energy. While acquisitions of renewable energy firms feature lower-than-average acquisition premia and generate positive short-term stock returns, they are found to exercise an overall negative short- and medium-term impact on the combined entities’ operating performance. Overall, capital markets appear to attach a sizeable premium to risky deals involving renewable energy firms, possibly in expectation of wealth accrual in the long term.

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Beginning Consolidation in the Renewable Energy Industry and Bidders’ M & A-Success

Cited by 7 publications

References 42 publications

Green M&A Deals and Bidders’ Value Creation: The Role of Sustainability in Post-Acquisition Performance

Green M&A Deals and Bidders’ Value Creation: The Role of Sustainability in Post-Acquisition Performance

Can Green Mergers and Acquisitions Curb the Financialization of Heavily Polluting Enterprises? Evidence From China

Characteristics and Shareholder Wealth Effects of Mergers and Acquisitions Involving European Renewable Energy Companies

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