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

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  • Teti, Emanuele
  • Tului, Stefano

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.

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  • Teti, Emanuele & Tului, Stefano, 2020. "Do mergers and acquisitions create shareholder value in the infrastructure and utility sectors? Analysis of market perceptions," Utilities Policy, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:juipol:v:64:y:2020:i:c:s0957178720300485
    DOI: 10.1016/j.jup.2020.101053
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    3. Mahesh Dahal & Joy Das, 2022. "Merger and Acquisition Announcement of Indian Banking Sector: A Pre-Post Analysis of Stock Market Reaction," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 14(2), pages 89-105, December.
    4. Simshauser, P., 2020. "Merchant utilities and boundaries of the firm: vertical integration in energy-only markets," Cambridge Working Papers in Economics 2039, Faculty of Economics, University of Cambridge.
    5. Nakatani, Ryota, 2022. "Productivity drivers of infrastructure companies: network industries to maximize economies of scale in the digital era," MPRA Paper 115531, University Library of Munich, Germany.
    6. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    7. Mika Goto & Tadaaki Tomikawa & Toshiyuki Sueyoshi, 2024. "Efficiency and Mergers and Acquisitions of Electric Utility Companies," Energies, MDPI, vol. 17(8), pages 1-17, April.

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