The Dominant Motives of Mergers and Acquisitions in the Energy Sector in Western Europe from the Perspective of Green Economy

Jerzy Niemczyk,Katarzyna Jasińska,Kamil Borowski,Aleksandra Sus,Bartosz Jasiński

doi:10.3390/en15031065

Abstract

The aim of the research, the results of which are used in this publication, was to identify the motives for mergers and acquisitions in the energy sector after the introduction of green economy elements in Western Europe. The mentioned region is the group of countries where changes related to the move to green energy are most visible (in addition to some countries from other regions, such as Singapore, New Zealand, or countries of the Arabian Peninsula). The research assumed the hypothesis that over the years since the Paris Conference the themes of mergers and acquisitions have changed from motives close to the views related to energy generation in traditional systems (black energy in large, monopolistic systems) to motives close to green energy (the research hypothesis). This was confirmed in the research, as business risk diversification (defined as diversification of the power sources from black to green) was the most popular M&A motive. In addition to emphasizing the direction of changes in the M&A motives, the authors of this study decided to check whether since 2015 (when the Paris Conference was organized) the motives behind the M&A transactions conducted by companies operating in the electrical energy generation sector have changed, making their motives close to the green energy dominant in Western Europe. Apart from verification of the abovementioned hypothesis, the aim of the research was to check whether there are any characteristic directions of changes in M&A motives across companies from particular Western European countries. The motives are changing from positional approaches to motives closer to resource approaches (green economy). The research used a critical analysis of the literature on the subject, a study that used desk research based on openly available sources and our own analytical tool developed for the needs of this analysis, which is the transformation of the concept of analysis of the M&A motives proposed in K. Borowski’s research: “The strategic development of the technology companies. The mergers and acquisitions perspective”.

Highlights

Licensee MDPI, Basel, Switzerland.Changes in global energy policy are already a fact
Motives behind M&A transactions conducted by Western European companies from the electrical energy generation sector and identify how those motives have been changing within the last 7 years as a result of the Paris Agreement on climate change, accepted by the world leaders during the 2015 United Nations Climate Change Conference. This will allow us to verify the hypothesis that the themes of mergers and acquisitions have changed from motives close to the views related to energy generation in traditional systems to motives close to green energy, and to understand how the companies operating in the electrical energy generation sector reacted to the agreement and how it changed their overall, long-term strategies
Europe after the introduction of green economy elements, by looking at the results of the empirical research presented in the article, we can conclude that entities in this sector undertake such activities mainly for the purpose of achieving a stabilization of activities based on the diversification of business risk

Summary

Introduction

Changes in global energy policy are already a fact. They have been confirmed by successive climate conferences, including the last one in 2021 in Glasgow. More and more countries are adopting and implementing those policies in the form of new laws regulating the activities of the energy sector in line with new, green economy standards. In all Western European countries, this sector is one of the most regulated, with significant state interference.

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Conclusion