Global corporate governance and takeovers in electric utilities: the case of ENERSIS, ENDESA and DUKE Energy

In the 1990s, the success of the ENERSIS conglomerate in Latin America captured the attention of world electric conglomerates like ENDESA Spain (ES) and DUKE Energy from the USA. ES tried in 1997 to take over ENERSIS, which ended with a colossal commitment of investments. The friendly tender offer lasting for more than 100 days implied significant Cumulative Abnormal Returns (CAR) that favour minority shareholders, contrasting with the subsequent hostile ES takeover that implied the realisation of CAR on ENERSIS conglomerate stocks that vanished before 60 days. This paper describes the strategies and results of the takeover.