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Mergers and acquisitions as a response to the deregulation of the electric power industry: value creation or value destruction?
01/31/08
05:05:16 pm, by damageva 
, 192 words, 144 views 
Categories: Energy, U.S., Companies,CSR,Business,Finance, Academic Study/Journal Article, Costs and Benefits
Mergers and acquisitions as a response to the deregulation of the electric power industry: value creation or value destruction?
Abstract: Many electric utilities, as a response to the deregulation of the electric power industry, adopted a strategy of acquiring other electric or gas utilities. We examine whether these merger and acquisition strategies create value for the utility shareholders and whether the strategies result in superior post-merger operating and stock-price performance relative to utilities that did not grow through acquisitions. We find little evidence that the mergers and acquisitions created long-term value for a fully diversified investor. Furthermore, the stock price and operating performance of the acquirers under performed the stock price and operating performance of a control portfolio of utilities that did not engage in merger activity.
Keywords: Deregulation, Electric utilities, Mergers and acquisitions
by John R. Becker-Blease 1, Lawrence G. Goldberg 2 and Fred R. Kaen 3
1. Washington State University, 14204 NE Salmon Creek Avenue, Vancouver, WA 98686-9600, USA; Email: jblease@vancouver.wsu.edu
2. University of Miami, 514 Jenkins Building, Coral Gables, FL 33124, USA
3. University of New Hampshire, 5 College Road, Durham, NH 03824, USA; Email: frk@christa.unh.edu
Journal of Regulatory Economics via Springer Publishing www.SpringerLink.com
Volume 33, Number 1; February, 2008; Pages 21-53
DOI: 10.1007/s11149-007-9047-7
http://www.springerlink.com/content/n130934508087qjn/
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