Exploring the effects of mergers and acquisitions on acquirers' sustainability orientation: Embedding, adding, or losing sustainability

Mergers and acquisitions (M&A) have been primarily investigated from a shareholder‐centric perspective of economic value maximization. However, this type of strategic initiatives also carries relevant implications for companies' capacity to respond to increasing social and environmental concerns among their stakeholders. In this study, we explore the processes related to, and nonfinancial consequences of, acquisitions involving sustainability‐oriented firms. Leveraging interviews with business decision makers and secondary data covering the pre‐ and post‐acquisition phases, we find three main paths leading the acquiring firms to embed, add, or lose sustainability. Therefore, three possible post‐acquisition outcomes emerge, associated with differences in acquirers' focus on sustainability infusing the deal rationale, their due diligence activity, and practices of stakeholder management and integration in the post‐acquisition phase.