Vertical Integration: Necessity or Distraction?

Deck: 

An analysis of the latest wave of unbundling, re-bundling, and convergence plays in the gas-power industries.

Fortnightly Magazine - April 15 2002
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The New Year brought turmoil to the merchant energy markets. The Enron bankruptcy, coming on the heels of the Sept. 11 tragedy, has sent a chill through the industry. The debt markets are scrutinizing the quality of earnings and mark-to-market accounting, while the equity markets have simply turned and run. Since June 30, 2001, the market capitalization of six large merchants not named Enron has fallen from $85 billion to $45 billion. At these prices, well-capitalized upstream players (e.g., BP, Shell and ExxonMobil), or the acquisitive European mega-players (RWE, E.On, EdF, Endesa, etc.), may be tempted to simply add a business line to their portfolios, via a distress sale.

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