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Consolidation and Market Power of Energy Utilities - The case of US-American and German Utility Takeovers

  • Andreas Freytag

    ()

    (University of Jena, Faculty of Economics)

  • Dirk Schiereck

    ()

    (European Business School, Endowed Chair of Banking and Finance)

  • Thomas W. Thomas

    ()

    (Witten/Herdecke University, Dept. of Economics and Management)

Between 1990 and 2002 a wave of takeovers was observed in the North American and European energy utilities market. We analyze the impact of these takeovers on market power, studying 70 takeovers of US-American and 69 takeovers of German energy utilities by applying event study methodology. Stock price reactions of acquiring and target firms as well as of their competitors are used as an indicator for market power. While we do not find any significant results pointing in this direction for transactions in the US, our findings clearly indicate that the potential to increase market power is indeed an important motive for takeovers within the German energy utilities market.

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Paper provided by Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät in its series Jenaer Schriften zur Wirtschaftswissenschaft with number 07/2005.

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Date of creation: 21 Jun 2005
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Handle: RePEc:jen:jenasw:2005-07
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