November 16, 2005—A majority of companies are looking to partner with third-party service providers or consider mergers and acquisition (M&A) activity in order to gain a competitive edge in the marketplace, according to the results of a survey of nearly 100 participants attending the Edison Electric Institute (EEI) Financial conference recently.
According to the pulse survey conducted by Capgemini U.S. LLC, a global leader in consulting, technology and outsourcing, 54% believe that outsourcing of IT and business processes to third parties is a “good thing” for the industry, with 32% believing that outsourcing can generate more free cash flow that can be invested in other parts of the business.
Nearly two-thirds (65%) of EEI Financial respondents believe that shareholder value is created by M&A activity, as 36% point to the creation of generation, transmission and distribution synergies increasing the viability of M&A strategies, while another 29% look to synergies and efficiencies in back-office management as key M&A drivers in 2006, the survey found.
However, many are still skeptical about the “time-to-value” of mergers in the wake of the passage of the Energy bill by the US Congress and the repeal of the Public Utilities Holding Company Act (PUHCA), with 18% declaring 2006 “the year of the utility merger,” and 48%pointing towards regulatory scrutiny as likely delaying the completion of most announced deals into 2007.
For more information, see the EEI Web site.
