Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Murat Binay

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Rights Information

2019 Nicholas G Pibl


The inclusion of ESG scores in the M&A due diligence process has given rise to empirical research on the relationship between ESG scores and percent premiums, realizable synergies, and post-merger success. However, little literature around ESG scores and the merger arbitrage spread exists, especially literature on target companies. Considering that target companies with higher ESG scores tend to have more transparency during the due diligence process and integrate with more ease, investors may have less uncertainty about the deal due to more accurate valuations and a higher potential for integration success. For this reason, there may be an empirical relationship between ESG scores and arbitrage spread. The study analyzes the impact of a target company’s ESG score on the merger arbitrage spread one day after the merger announcement, while controlling for company and deal characteristics between 2002 and 2019. This paper finds a negative and statistically significant relationship between target company ESG score and the merger arbitrage spread.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.