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The Impact of Mergers and Acquisitions and Sustainability on Company Performance in the Pharmaceutical Sector

Author

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  • Diana Marieta Mihaiu

    (Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

  • Radu-Alexandru Șerban

    (Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

  • Alin Opreana

    (Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

  • Mihai Țichindelean

    (Department of Management, Marketing and Business Administration, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

  • Vasile Brătian

    (Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

  • Liliana Barbu

    (Department of Finance and Accounting, Lucian Blaga University of Sibiu, 550024 Sibiu, Romania)

Abstract

The primary goal of this study was to determine the impact of mergers and acquisitions (M&A) and the environmental, social, and governance (ESG) sustainability scores of companies. In this regard, efforts to measure and analyze the evolution of a company’s performance, taking into account financial and non-financial measures using a score function, are adapted to the pharmaceutical sector. The sample consisted of 100 leading pharmaceutical companies, ranked by stock market capitalization, who registered 30% ( n = 492) of the total M&A transactions over the study period (2010–2020). There was a direct and positive link between the M&A process and the evolution of company performance. The ESG score, as an indicator for measuring sustainability, has a positive and direct impact on company performance, indicating that a high ESG score determines an increase in company performance. A similar impact is identified for companies involved in M&A processes, meaning that companies in the pharmaceutical sector tend to register a performance improvement.

Suggested Citation

  • Diana Marieta Mihaiu & Radu-Alexandru Șerban & Alin Opreana & Mihai Țichindelean & Vasile Brătian & Liliana Barbu, 2021. "The Impact of Mergers and Acquisitions and Sustainability on Company Performance in the Pharmaceutical Sector," Sustainability, MDPI, vol. 13(12), pages 1-24, June.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:12:p:6525-:d:570910
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    1. Karolis Andriuškevičius & Dalia Štreimikienė & Irena Alebaitė, 2022. "Convergence between Indicators for Measuring Sustainable Development and M&A Performance in the Energy Sector," Sustainability, MDPI, vol. 14(16), pages 1-23, August.
    2. Jiajia Liu & Zhenzhen Ge & Yahan Wang, 2024. "Role of environmental, social, and governance rating data in predicting financial risk and risk management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 260-273, January.
    3. Karolis Andriuškevičius & Dalia Štreimikienė, 2022. "Energy M&A Market in the Baltic States Analyzed through the Lens of Sustainable Development," Energies, MDPI, vol. 15(21), pages 1-21, October.

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