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Expanding opportunities: Strategic buying of utilities in new EU member states

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  • LaBelle, Michael

Abstract

During the 1990s, limited investment opportunities in Western Europe, the opening of the energy markets in Eastern Europe, and the future expansion of the European Union (EU) prompted an expansionist strategy by energy companies from the original EU member states. In this paper, the acquisition and divestiture activities and strategies of utilities from France and Germany are analyzed in the context of the 2004 and 2007 EU enlargements. Through quantitative and qualitative data analysis, including the development of two case studies, the strategy for expansion and evolution in new member states is examined. The results demonstrate a concerted effort to establish economies of scale through ownership of distribution companies. A change in strategy occurs as these privatization opportunities disappear. Generation and trading activity become the growth area for these companies as electricity supply becomes another factor that can contribute to the economies of scale. Recent EU-supported efforts towards regionalization of electricity markets, positions these companies well due to their strong regional presence. This paper will explore these issues in the context of ownership and geographic distribution.

Suggested Citation

  • LaBelle, Michael, 2009. "Expanding opportunities: Strategic buying of utilities in new EU member states," Energy Policy, Elsevier, vol. 37(11), pages 4672-4678, November.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4672-4678
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    Cited by:

    1. LaBelle, Michael Carnegie, 2017. "In pursuit of energy justice," Energy Policy, Elsevier, vol. 107(C), pages 615-620.
    2. Patricia Bachiller & Giuseppe Grossi, 2012. "Great expectations but poor results: financial and social performance of the T oscana Energia merger," Public Money & Management, Taylor & Francis Journals, vol. 32(1), pages 69-74, January.
    3. Michael Carnegie LaBelle, 2023. "Energy as a weapon of war: Lessons from 50 years of energy interdependence," Global Policy, London School of Economics and Political Science, vol. 14(3), pages 531-547, June.
    4. Gampert, Markus & Madlener, Reinhard, 2011. "Pan-European management of electricity portfolios: Risks and opportunities of contract bundling," Energy Policy, Elsevier, vol. 39(5), pages 2855-2865, May.
    5. LaBelle, Michael, 2012. "Constructing post-carbon institutions: Assessing EU carbon reduction efforts through an institutional risk governance approach," Energy Policy, Elsevier, vol. 40(C), pages 390-403.

    More about this item

    Keywords

    Mergers Utilities Privatization;

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