Utilities will see long-term benefits from consolidation

The European utility sector is consolidating as a result of market liberalisation, according to Suzanne Ferlic, manager, European credit research at Schroders. Ferlic says increased competition in home markets and business diversification through M&A activity is leading to long-term deterioration in credit quality for companies in the European utility sector. 'M&A activity continues to be a focus of the large, highly rated incumbents as they expand to other countries in response to the opening of their home markets,' she says. 'This expansion has been the catalyst for the decline of...