Title: Global corporate governance and takeovers in electric utilities: the case of ENERSIS, ENDESA and DUKE Energy

Authors: Ricardo Raineri

Addresses: Department of Industrial and Systems Engineering, Engineering School, Pontificia Universidad Catolica de Chile, Casilla 306, Correo 22, Santiago, Chile

Abstract: In the 1990s, the success of the ENERSIS conglomerate in Latin America captured the attention of world electric conglomerates like ENDESA Spain (ES) and DUKE Energy from the USA. ES tried in 1997 to take over ENERSIS, which ended with a colossal commitment of investments. The friendly tender offer lasting for more than 100 days implied significant Cumulative Abnormal Returns (CAR) that favour minority shareholders, contrasting with the subsequent hostile ES takeover that implied the realisation of CAR on ENERSIS conglomerate stocks that vanished before 60 days. This paper describes the strategies and results of the takeover.

Keywords: corporate governance; takeovers; tender offer; dual class stocks; control prize; globalisation; electricity industry; energy finance.

DOI: 10.1504/IJGEI.2006.009729

International Journal of Global Energy Issues, 2006 Vol.26 No.1/2, pp.170 - 212

Published online: 08 May 2006 *

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