Do ESG Synergies Matter in Mergers and Acquisition? Evidence on Sustainability Alignment and Post -Merger Value Creation

Environmental, Social, and Governance (ESG) considerations have become increasingly influential in shaping corporate strategies, particularly in the context of mergers and acquisitions (M&A). While prior M&A research has largely focused on financial and operational synergies, relatively limited attention has been paid to ESG synergies arising from sustainability alignment between acquiring and target firms. This conceptual paper explores whether and how ESG synergies matter in M&A by examining the role of sustainability alignment in post-merger value creation. Drawing on stakeholder theory, the resource-based view, and institutional theory, the paper develops a conceptual framework that explains the mechanisms through which ESG alignment can influence post-merger integration, risk mitigation, and long-term value outcomes. The study argues that ESG synergies, when effectively integrated, can act as strategic assets that enhance firm value beyond traditional financial synergies. By synthesizing existing literature, this paper contributes to the growing body of research on sustainable finance and strategic management and provides theoretical insights and managerial implications for incorporating ESG considerations into M&A decision-making.