Merger Integration View

Sustaining Supply Chain Value
June, 2011

There are the obvious reasons for the recent uptick in utility mergers activity: 

  • Enhancing company productivity
  • Political factors
  • Cutting down expenses and increasing revenues
  • Attaining scale and leveraging assets              

But, what it really comes down to is the need to survive in these difficult market conditions. Power is becoming more and more expensive to generate; meanwhile rate payers and regulators are preventing rate increases. To meet the evolving market pressures from regulators and emerging technologies needs, cash is ultimately king for survival. Mergers offer utilities a way to leverage an integrated asset base and extend their customer base to increase revenues while decreasing costs. However, anticipated synergy savings are not a guarantee, which puts the merger value at risk. What does it take to accurately identify and sustain savings? Turn to your supply chain.

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