Dynamics of industrial consolidation: mergers, acquisitions and joint ventures in EU27 electricity and gas industry

This research paper explores and characterizes the sector specific consolidation of the EU27 electricity and gas industry since privatisation. Although, the dynamics and triggers of consolidation are commonly known, Wirtz(2006:1335) concludes “There is little empiric evidence available about Mergers & Acquisitions (M&A) and strategies in pre- and post-liberalised energy markets”. Kummerer (2005) and Gregoriou (2007) summarise the general research situation with few studies available analysing international M&As. Newbery (2007:9) highlights the implications of cross-border M&A activities on both industries and the institutional design in the EU, referring to the research of Codognet et al. (2003a; 2003b; 2004). In addition, several studies indicateincreasing concentration tendencies in domestic markets, often associated with increased M&A activities (compare Zenke (2004), Eurostat (2010), CapGemini (2010)) as result of the European sector reform policy (compare Kreis (2004)). M&A activities and large-scale mergers, advanced by the different institutional design and timely different implementation of the EU directives (96/92/EC and 98/30/EC) among the EU27 member states, formed the world largest companies – by any means – in the electricity and gas sector.