TY - JOUR
T1 - Mergers and Acquisitions in European and North American energy markets: empirical analysis of legal and ownership unbundling
AU - Bogner, Stefan
AU - Gasser, Stephan
AU - Rammerstorfer, Margarethe
PY - 2015
Y1 - 2015
N2 - Competition and antitrust law aims to prevent companies from engaging in anti-competitive behavior and to promote and protect market competition. In this context, mergers and acquisitions (M&As) are under particular scrutiny, since they are often assumed to be motivated by possible market power increases, thus adversely affecting market efficiency. With a view to recent efforts within the European Union to increase the effectiveness of competition law in the energy sector (that is, legal and ownership unbundling as policy tools geared towards forcing corporations into demerging transactions), an event study approach is applied in this article to evaluate the market response to the announcement of mergers and acquisitions in EU and U.S. energy markets and to determine whether or not the hypothesis that M&As result in increased market power of the joined companies actually holds true. Findings indicate that increases in market power are not the main motive for energy market M&As. The results thus oppose the general adequacy of legal and ownership unbundling as veritable competition law instruments against market imperfections and failures, but indicate that unbundling can indeed be a viable policy solution if implemented on a case-by-case basis.
AB - Competition and antitrust law aims to prevent companies from engaging in anti-competitive behavior and to promote and protect market competition. In this context, mergers and acquisitions (M&As) are under particular scrutiny, since they are often assumed to be motivated by possible market power increases, thus adversely affecting market efficiency. With a view to recent efforts within the European Union to increase the effectiveness of competition law in the energy sector (that is, legal and ownership unbundling as policy tools geared towards forcing corporations into demerging transactions), an event study approach is applied in this article to evaluate the market response to the announcement of mergers and acquisitions in EU and U.S. energy markets and to determine whether or not the hypothesis that M&As result in increased market power of the joined companies actually holds true. Findings indicate that increases in market power are not the main motive for energy market M&As. The results thus oppose the general adequacy of legal and ownership unbundling as veritable competition law instruments against market imperfections and failures, but indicate that unbundling can indeed be a viable policy solution if implemented on a case-by-case basis.
UR - http://jcle.oxfordjournals.org/content/11/4/935.abstract
U2 - 10.1093/joclec/nhv027
DO - 10.1093/joclec/nhv027
M3 - Journal article
SN - 1744-6414
VL - 11
SP - 935
EP - 955
JO - Journal of Competition Law and Economics
JF - Journal of Competition Law and Economics
IS - 4
ER -