Pre-And Post Crisis Analysis of the Industrial Consolidation in the Utilities Sector

Abstract

This empiric study analyzes the Mergers & Acquisition (M&A) activities of stock-listed utilities companies. The study provides a sector analysis on how the industrial consolidation took place in the past and how it will develop in the next decade. Industrial consolidation is a global mega-trend that evolved during the last three decades – also in the utilities sector. Privatization and market liberalization are the initial key transformation processes for the M&A activity in this industry. As first result of all: The companies participated in the survey take the crisis as advantage for opportune asset acquisition options. Although the trend of M&As declined after the peak in 2007 some find themselves in a more favorable situation than competitors. A survey participator expressed the current situation with “business as usual”. The majority of the survey participants prognosticate an increasing concentration in their domestic markets. The future industrial consolidation will be the result of regulatory pressure, further privatization/liberalization and/or will be market driven. This research paper is structured as follows: The overview gives a brief insight about the global M&A development in the utilities sector. The second section defines the methods of the survey and the survey’s and participant’s structure. The third section illustrates the research findings and results of the survey on the industrial consolidation. The fourth section draws the conclusions.

Keywords: mergers & acquisition, industrial consolidation, utilities energy industry, competition

JEL Classification: G34