A Retrospective Evaluation of the GDF/Suez Merger: Effects on Gas Hub Prices

37 Pages Posted: 29 Nov 2017

See all articles by Elena Argentesi

Elena Argentesi

University of Bologna - Department of Economics

Albert Banal-Estañol

Universitat Pompeu Fabra - Department of Economics and Business (DEB); City University London - Department of Economics

Jo Seldeslachts

KU Leuven - Faculty of Business and Economics (FEB); German Institute for Economic Research (DIW Berlin)

Meagan Andrews

Independent

Multiple version iconThere are 2 versions of this paper

Date Written: May 2017

Abstract

We present an ex-post analysis of the effects of GDF’s acquisition of Suez in 2006 created one of the world’s largest energy companies. We perform an econometric analysis, based on Difference-in-Difference techniques on the market for trading on the Zeebrugge gas hub in Belgium. Removing barriers to entry and facilitating access to the hub through ownership unbundling were an important part of the objectives of the remedies imposed by the European Commission. Our analysis shows a price decline after the merger. This decline suggests the remedies were effective in limiting the potential anti-competitive effects of the merger. Moreover, it suggests that ownership unbundling has generated improved access to the hub. Therefore, the remedies may have done more than simply mitigate the potential anti-competitive effects of the merger; they may have effectively created competition.

Keywords: Mergers, Ex-post Evaluation, Gas sector, Hub prices

JEL Classification: L4, Q4

Suggested Citation

Argentesi, Elena and Banal Estañol, Albert and Seldeslachts, Jo and Andrews, Meagan, A Retrospective Evaluation of the GDF/Suez Merger: Effects on Gas Hub Prices (May 2017). Available at SSRN: https://ssrn.com/abstract=3076821 or http://dx.doi.org/10.2139/ssrn.3076821

Elena Argentesi (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, BO 40141
Italy
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+39 051 209 8040 (Fax)

HOME PAGE: http://www2.dse.unibo.it/argentes/

Albert Banal Estañol

Universitat Pompeu Fabra - Department of Economics and Business (DEB) ( email )

Barcelona, 08005
Spain

City University London - Department of Economics ( email )

Northampton Square
London, EC1V 0HB
United Kingdom

Jo Seldeslachts

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Meagan Andrews

Independent ( email )

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