An integration in energy systems : the case of EDP renováveis and Martifer Group : mergers and acquisitions

• Autor(a) principal: Sousa, Ana Rita Frazão de
• Data de Publicação: 2013
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/15432
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The recent advent of privatization of one of the main actors in the Energy Industry Sector, in Portugal, made the whole segment to be under the spotlight. The liberalization of the energy segment in Portugal, the vicissitudes in the regulation and the increasing importance of the renewable segment conducted to an amplified interest in studying a possible deal with this industry. Furthermore, when assessing the companies and its potential in terms of performing a deal, the criteria were not only the likelihood of becoming real, but also the existence of an added-value analysis. The possibility of creating a trend in the industry, integrating businesses so far separated enhanced the research and demanded a detailed overview of more than one sector. In fact, consolidation, liberalization and regulation are generic concepts that cover a large spectrum of situations. However, all of them are attributable to the Energy Industry nowadays. Hence, such a wide segment facing several challenges brought up the possibility of a vertical integration of EDP Renováveis (EDP R) with a company in the energy systems segment as a key-movement. Consequently, Martifer Group SGPS (Martifer) came as an obvious partner. Tacking fiercer competition (consolidation and liberalization), and uncertainty in the mature markets towards renewable energy production subsidization (regulation) due to the hazy economic environment, with decreasing costs by integrating a downstream company may be a valuable comparative advantage. Both companies are quoted in the Portuguese Stock Market, with a worldwide scope though - increasing the benefit of merging. This dissertation will, then, focuses on analyzing the previously referred companies, being Martifer the target of EDP R in the attempt to integrate the business segments, not only in the wind segment, but also diversify through the solar one. Additionally there is potential of evolving in the best practices developed and improve management. In order to do so a careful industry analysis was developed, covering in total five industries: metallic constructions, wind and solar energy systems production and project development; and electricity production from both renewable sources: wind and solar. EDP R and Martifer are, as of 31st of December 2012, according to the valuation performed, undervalued companies, with considerable upside values. Moreover, the latent synergies were esteemed and represent a 40% premium over Martifer’s average market capitalization of 2012.