Excess returns in electric utility mergers during transition to competition

A standard event methodology is used to evaluate recent electric utility me rgers as the industry moves to competitive generation markets. Statisticall y significant effects were focused on the day before the announcement and t he day of the announcement, and were fairly small, although statistically s ignificant. Shareholders perceive very little merger benefits occurring in a highly competitive generation sector. Markets reacted more positively to the gas/electric mergers, indicating stockholder appreciation for opportuni ties for scope economies. U.S. acquirers suffered no significant wealth los ses in mergers with British and Australian utilities.