Corporate governance models and their impact on financial performance. Evidence from Italian utility listed companies

This paper analyses the theme of the corporate governance models of Italian utilities companies and explores how the changes of ownership structure after a merger affects financial performance. The objective of this paper is to study whether the mergers of utilities are effective for companies to be more competitive. We compare the financial performance of four Italian utility listed companies listed (A2A, IRIDE, HERA and ENIA) before and after the merger. Specifically we analyse six financial ratios (P/L for period, Profit margin, EBITDA, ROE, ROA and Gearing). Our results show that utility mergers are effective to create a more competitive firm because of the changes in the ownership of the company and consequently in the corporate governance system. Results also indicate that a listed merger company has a higher financial performance those pre-merger companies.