From MSDN:
In string concatenation operations, the C# compiler treats a null string the same as an empty string,
Even though xyz is null, calling the += operator (which is converted to a call to the + operator (*)) on it does not throw a NullReferenceException because it’s a static method. In pseudo code:
xyz = String.+(null, null);
The implementation will then interpret this as if it was
xyz = String.+("", "");
(*) Section §7.17.2 of the C# specification:
An operation of the form x op= y is processed by applying binary operator overload resolution (§7.3.4) as if the operation was written x op y.