Understanding How the Strategic Similarities between Energy Companies Influence the Post-mergers and Acquisitions Performances

Guendalina Capece, Francesca Di Pillo, Nathan Levialdi, Giada Perotto

Abstract


The energy sector has experienced rapid evolution in recent years, following the liberalization of the electricity and natural gas markets, driven by the European Union. These developments have led to a certain level of dynamism in Italy, particularly as concerns mergers and acquisitions (M&As) within the sector. This article examines the influence of strategic similarities between the target and bidder companies on their post-M&A performances. The model used involves a hierarchical regression relating the indexes of similarity between the merging companies, regarding their economic-financial management. The results reveal the influence of the strategic similarities and differences on the post-M&A performances of the companies, showing how the positive or negative effect depends on certain characteristics, such as their structure of share capital, business segments and size. The study evidences the strategic variables that should be considered in choosing the optimal target companies.

Keywords: Liberalization of energy sectors, M&As, Company performance evaluation, Strategic similarity index, Target company’s characteristics.

JEL Classifications: G34, L25, L98, Q43, Q48


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