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Market power consolidation and M&A success: A study of US-American and German utility takeovers

Author

Listed:
  • Robert Fraunhoffer

    (Chair of Corporate Finance, Darmstadt University of Technology, Hochschulstrasse 1, 64289 Darmstadt, Germany)

  • Andreas Freytag

    (Chair for Economic Policy, Friedrich-Schiller Universität Jena, Jena, Germany)

  • Dirk Schiereck

    (Chair of Corporate Finance, Darmstadt University of Technology, Darmstadt,Germany)

Abstract

A wave of mergers and acquisitions (M&A) was observed in the North American and European energy utilities market. We analyze the impact of these M&A transactions on market power, studying 139 takeovers of energy utilities by applying event study methodology. Stock price reactions of acquiring and target firms as well as of their competitors are used to detect changes of market power. While we do not find any significant results pointing in this direction for transactions in the US, our findings indicate that the potential to increase market power is indeed an important motive for takeovers within the German energy utilities market.

Suggested Citation

  • Robert Fraunhoffer & Andreas Freytag & Dirk Schiereck, 2013. "Market power consolidation and M&A success: A study of US-American and German utility takeovers," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 1(1), pages 29-45, December.
    • Handle: RePEc:lrc:lareco:v:1:y:2013:i:1:p:29-45
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    Cited by:

    1. Mirosław Wasilewski & Serhiy Zabolotnyy & Dmytro Osiichuk, 2021. "Characteristics and Shareholder Wealth Effects of Mergers and Acquisitions Involving European Renewable Energy Companies," Energies, MDPI, vol. 14(21), pages 1-20, November.

    More about this item

    Keywords

    Energy utilities; Mergers and acquisitions; Market power.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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