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

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.

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Publication Details

Journal
Journal of risk and financial management
Published
2025-08-19
DOI
https://doi.org/10.3390/jrfm18080459
Citations
1
Primary Topic
Capital Investment and Risk Analysis
Type
article
Field-Weighted Citation Impact
2.21
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article

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

Andrejs Čirjevskis
1 citations
Journal of risk and financial management
Capital Investment and Risk Analysis
2.21
article

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

Andrejs Čirjevskis
article en
1 citations

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.

Journal of risk and financial managementVol. 18(8)
RISEBA University of Applied Sciences (LV)
Openalex Percentile: Top 11%
Capital Investment and Risk Analysis
2.21
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