Keywords: energy, mergers, efficiency, market power, corporate restructuring
Implication of restructuring for producers, consumers, investors and society at large
The tremendous changes that have been taking place in the world energy sector raise two obvious questions What is the motivation behind them, and what are their consequences? These two questions are addressed in the present paper. It is argued that corporate investment and mergers are often motivated to increase the size of a company rather than its profits, and that many mergers actually reduce corporate efficiency rather than improve it. Evidence in support of this position is reviewed and related to the restructuring and mergers taking place in the energy sector.