Great expectations but poor results: financial and social performance of the T oscana Energia merger

Abstract

This article investigates the importance of mergers in the public sector , analysing the case of T oscana Energia—a gas supplier in Italy. T oscana Energia was formed by merging three entities. There was no improvement in financial performance after the merger. Realistic merger benefits include competitive gains and, in this case, a better deal for consumers. P oliticians under pressure to merge should insist on the public sector being the majority owner in utilities. The best merger outcomes are of smaller municipal enterprises.

Keywords:

• Gas industry
• public sector mergers
• public utilities
• regulation
• Toscana Energia

Acknowledgments

The authors would like to thank this journal's two anonymous referees and Public Money & Management's editor for their helpful comments and suggestions. This study was carried out with the financial support of the Spanish National R&D Plan through research project ECO2010-17463 (ECON FEDER).

Additional information

Notes on contributors

Patricia Bachiller

Patricia Bachiller is a lecturer in accounting and finance, University of Zaragoza, Spain.

Giuseppe Grossi

Giuseppe Grossi is an associate professor of international public management and accounting at the University of Kristianstad, Sweden and at the University of Siena, Italy.