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Market dynamics of buyout acquisitions in the renewable energy and cleantech sectors: An event study approach

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  • Palmquist, Samuel
  • Bask, Mikael

Abstract

This paper examined the market dynamics of mergers and acquisitions in the renewable energy and cleantech sectors. We analyzed abnormal returns from 273 announced and 54 completed buyout acquisitions that took place between the years 1997 and 2014, and we used an event study methodology to test (i) whether renewable energy and cleantech deals experienced higher rates of abnormal returns than traditional energy and mining deals, (ii) whether deal completions displayed similar effects as deal announcements, and (iii) whether homogenous deals experienced higher rates of abnormal returns than heterogeneous deals. Our findings were (i) that the traditional energy and mining sector outperformed the renewable energy and cleantech sectors in homogenous deals, (ii) that the deal completion effect followed the announcement effect in 9 of 12 cases, and (iii) that homogenous deals outperformed heterogeneous deals. To the best of our knowledge, comparisons of deal announcements and deal completion effects in the renewable energy and cleantech sectors have not to date been previously examined in the literature.

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  • Palmquist, Samuel & Bask, Mikael, 2016. "Market dynamics of buyout acquisitions in the renewable energy and cleantech sectors: An event study approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 271-278.
    • Handle: RePEc:eee:rensus:v:64:y:2016:i:c:p:271-278
    DOI: 10.1016/j.rser.2016.06.011
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    1. Eisenbach, S. & Ettenhuber, C. & Flotow, P. von & Schiereck, D., 2011. "Beginning Consolidation in the Renewable Energy Industry and Bidders’ M&A-Success," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 56459, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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    5. Yoo, Kyungjin & Lee, Youah & Heo, Eunnyeong, 2013. "Economic effects by merger and acquisition types in the renewable energy sector: An event study approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 694-701.
    6. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
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    Cited by:

    1. Ohsung Kwon & Sangmin Lim & Duk Hee Lee, 2018. "Acquiring startups in the energy sector: a study of firm value and environmental policy," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1376-1384, December.
    2. Mosquera-López, Stephanía & Uribe, Jorge M. & Manotas-Duque, Diego F., 2018. "Effect of stopping hydroelectric power generation on the dynamics of electricity prices: An event study approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 456-467.
    3. Kevin Riehl & Florian Kiesel & Dirk Schiereck, 2022. "Political and Socioeconomic Factors That Determine the Financial Outcome of Successful Green Innovation," Sustainability, MDPI, vol. 14(6), pages 1-23, March.
    4. Riehl, Kevin & Kiesel, Florian & Schiereck, Dirk, 2022. "Political and Socioeconomic Factors That Determine the Financial Outcome of Successful Green Innovation," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 132099, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Guanyi Yu & Qiang Lin & Xiaoqian Qi, 2021. "Government Incentive Contracts for Microgrid Users," Energies, MDPI, vol. 14(4), pages 1-16, February.

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