M&A in the Italian energy market

Abstract

The Italian Energy industry has undergone changes and it had to adapt to alterations given by the economic and environmental trend in the last decades, especially in the last months with the war outbreak. The transition to the green economy and to the renewable energy has put this market in front of challenges of various perspectives leading it to a new framework. The passage from a centralised to a more decentralised arrangement, both in terms of consumption and production, has affected the organisational structure of the interested firms. Furthermore, new EU policies have been enacted in order to face the severe environmental issue, using the energy efficiency as a tool to incentivise the improvement on sustainability and renewability. This paper investigates the Italian energy industry and the effects given by M&A in it. Mergers and Acquisitions are operations relevant not only from a financial or corporate point of view, but they also imply effects on the economy related to the market and its forces. We focus our study on the merger and acquisitions of the firms involved in the research. We build a model which studies the probability of being acquired of the firms involved in the analysis and all the factors that influence this probability, since the latter implies a higher concentration in the market. The analysis is implemented by using the stochastic frontier analysis. In addition, we include in the analysis all the variables that may affect the dependent variable such as the revenues, costs management, nationality others. The analysis makes use of data on M&A collected on Bloomberg and data on firms’ balance sheet collected on the Aida database, both for the period from 2011 to 2020. According to this analysis, this paper sets his aim on the study of the energy market based on the evolution which interested the most recent past.