ESG disclosure and ESG performance of seeking-buyer companies

We examine the ESG practices of companies that publicly seek a buyer. Our focus is on whether these companies increase ESG disclosure and performance before the ‘seeking-buyer’ announcement and whether these actions influence the acquisition outcome. Based on a sample of US seeking-buyer firms for the period 2000–2021, we find that seeking-buyer status is positively related to ESG disclosure but not ESG performance. We do not observe that ESG disclosure and performance are associated with the likelihood of being acquired. Our results are consistent with deals being based on targets’ financial characteristics, especially when buyers lack a shared understanding of disclosed ESG information and when this information is not supported by ESG performance.