Great expectations but poor results: financial and social performance of the Toscana Energia merger

This article investigates the importance of mergers in the public sector, analysing the case of Toscana Energia-a gas supplier in Italy. Toscana Energia was formed by merging three entities. There was no improvement in financial performance after the merger. Realistic merger benefits include competitive gains and, in this case, a better deal for consumers. Politicians under pressure to merge should insist on the public sector being the majority owner in utilities. The best merger outcomes are of smaller municipal enterprises.