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Do mergers and acquisitions create shareholder value in the infrastructure and utility sectors? Analysis of market perceptions

Emanuele Teti and Stefano Tului

Utilities Policy, 2020, vol. 64, issue C

Abstract: Through an analysis over a 20-year period from 1997 to 2017 for a global sample of listed infrastructure companies, 80% of which were utilities, this study shows that target companies' Cumulative Average Abnormal Returns (CAARs) are positive and statistically significant, while acquirer firms earn positive but not statistically significant CAARs. The results obtained must be viewed in light of the restructuring that has distinguished the last 20 years by strongly modifying the infrastructure environment and facilitating the diffusion of mergers and acquisitions (M&A). Our results support the financial reasonableness and potential efficiency of M&A transactions in the infrastructure and public utility sectors, with specific reference to target companies.

Keywords: Infrastructure; Utilities; Mergers and acquisitions (M&As); CAARs; Restructuring (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:64:y:2020:i:c:s0957178720300485

DOI: 10.1016/j.jup.2020.101053

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