Mergers and Acquisitions in European and North American Energy Markets: Implications for the Assessment of Legal and Ownership Unbundling

Journal of Competition Law and Economics, Volume 11, Issue 4, Pp. 935-954, 2015

Posted: 15 Sep 2012 Last revised: 25 Mar 2016

See all articles by Stefan Bogner

Stefan Bogner

Vienna University of Economics and Business Administration

Stephan M. Gasser

Vienna University of Economics and Business - Institute for Finance, Banking and Insurance

Margarethe Rammerstorfer

Vienna University of Economics and Business - Department of Corporate Finance

Date Written: October 8, 2015

Abstract

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 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 competition law effectiveness in the energy market (i.e. legal and ownership unbundling as policy tools geared towards forcing corporations into demerging transactions), an event study approach is applied in this paper to evaluate the market response to the announcement of mergers and acquisitions in EU and US 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.

Keywords: Mergers, Acquisitions, Energy Markets, Regulation, Unbundling

JEL Classification: G34, G38, L40, L97

Suggested Citation

Bogner, Stefan and Gasser, Stephan M. and Rammerstorfer, Margarethe, Mergers and Acquisitions in European and North American Energy Markets: Implications for the Assessment of Legal and Ownership Unbundling (October 8, 2015). Journal of Competition Law and Economics, Volume 11, Issue 4, Pp. 935-954, 2015, Available at SSRN: https://ssrn.com/abstract=2146590 or http://dx.doi.org/10.2139/ssrn.2146590

Stefan Bogner

Vienna University of Economics and Business Administration ( email )

Augasse 2-6
1090 Vienna
Austria
+ 43 (1) 313 36 4242 (Phone)
+ 43 (1) 313 36 736 (Fax)

Stephan M. Gasser (Contact Author)

Vienna University of Economics and Business - Institute for Finance, Banking and Insurance ( email )

Welthandelsplatz 1
Building D4
Vienna, 1020
Austria
+43 1 31336 6245 (Phone)

HOME PAGE: http://https://www.wu.ac.at/finance/people/faculty/gasser/

Margarethe Rammerstorfer

Vienna University of Economics and Business - Department of Corporate Finance ( email )

Welthandelsplatz 1
1020 Vienna
Austria

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