"Fifty in Five": The Prospects for Merger in the Electric Utility Industry

Dennis J Ray and Howard E Thompson

Journal of Regulatory Economics, 1990, vol. 2, issue 2, 28 pages

Abstract: By analyzing four case studies of merger attempts between electric utilities, the authors conclude that there are not strong incentives for a wave of combinations in the industry. Potential synergy gains do not provide a strong motivation since they are likely already being captured through joint ventures and coordination agreements. Those that still exist would most likely be distributed to rate payers by regulatory decisions. Managerial incentives of the bidder are countered by the desire of target management to remain independent. Potential gains to the financial community from a wave of mergers are large, but the regulatory process provides a dampening of this otherwise strong incentive. Copyright 1990 by Kluwer Academic Publishers

Date: 1990
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