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The Integration of Value-at-Risk in Assessing ESG-Based Collaborative Synergies in Cross-Border Acquisitions: Real Options Approach

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  • Andrejs Čirjevskis

    (Faculty of Business and Economics, RISEBA University of Applied Sciences, Meza Street 3, LV-1048 Riga, Latvia)

Abstract

This paper presents a novel framework for valuing ESG-based collaborative synergies in cross-border mergers and acquisitions (M&A) using a real options approach, with a specific application to L’Oréal’s acquisition of Aesop. The methodology integrates a Value-at-Risk (VaR) model to quantify and adjust for ESG-related risks, providing a more robust valuation framework. We demonstrate how linking sustainability practices with real option valuation in multinational corporations (MNCs) can enhance long-term value creation and reduce risk, thereby aligning synergy goals with ESG objectives. By applying our VaR-adjusted model to the L’Oréal–Aesop case, this study contributes to corporate finance by integrating advanced risk management and sustainability into synergy valuation, and to international business by providing an empirical example of this integrated valuation approach for cross-border acquisitions.

Suggested Citation

  • Andrejs Čirjevskis, 2025. "The Integration of Value-at-Risk in Assessing ESG-Based Collaborative Synergies in Cross-Border Acquisitions: Real Options Approach," JRFM, MDPI, vol. 18(8), pages 1-36, August.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:8:p:459-:d:1727263
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    References listed on IDEAS

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    Cited by:

    1. Dzintra Atstāja, 2025. "Leveraging Sustainable Development Goals to Transform Higher Education and Advance Sustainability Science," Sustainability, MDPI, vol. 17(17), pages 1-30, August.

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