Mergers and Acquisitions in the Energy Industry following the Market Liberalization: the Italian Case

Starting from 1996 (electricity) and 1998 (gas), the first liberalisation directives in the European energy markets have slowly opened up new competitive scenarios. In Italy, the change in the regulatory framework, transposed during the 2000s, has deeply modified the industrial organization of the energy sector. In fact, the energy companies have implemented new competitive strategies in order to exploit the potential benefits arising from the new regulatory framework. In particular, many companies have carried out mergers and acquisitions (M&As) in order to achieve the benefits related to the exploitation of several potential synergies in economic, financial and organizational aspects. The purpose of this paper is to analyze the M&As carried out in the Italian energy industry in the five years following the market liberalization (2006-2010). Furthermore, this paper investigates how the market structure has changed following the concentration of the energy retail sector. For this purpose, we apply the Herfindahl–Hirschman Index and the Concentration Ratio to estimate the market concentration in the electricity and gas retail sector.