Consolidation and Market Power of Energy Utilities - The case of US-American and German Utility Takeovers

Andreas Freytag (), Dirk Schiereck () and Thomas W. Thomas ()
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Dirk Schiereck: European Business School, Endowed Chair of Banking and Finance, Postal: D-65375 Oestrich-Winkel
Thomas W. Thomas: Witten/Herdecke University, Dept. of Economics and Management, Postal: D-58448 Witten

No 07/2005, Jenaer Schriften zur Wirtschaftswissenschaft from Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät

Abstract: Between 1990 and 2002 a wave of takeovers was observed in the North American and European energy utilities market. We analyze the impact of these takeovers on market power, studying 70 takeovers of US-American and 69 takeovers of German energy utilities by applying event study methodology. Stock price reactions of acquiring and target firms as well as of their competitors are used as an indicator for market power. While we do not find any significant results pointing in this direction for transactions in the US, our findings clearly indicate that the potential to increase market power is indeed an important motive for takeovers within the German energy utilities market.

Keywords: acquisitions; energy utilities; market power; oligopoly; regulation (search for similar items in EconPapers)
JEL-codes: L40 L94 L95 G14 G34 (search for similar items in EconPapers)
Date: 2005-06-21
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