THE IMPACT OF MERGERS AND ACQUISITION ON CORPORATE GROWTH IN NIGERIA

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Date
1998-12
Authors
MARY, Dasikwo Musa
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Abstract
This research work is an extensive study on "The impact of Mergers and Acquisition on Corporate Growth in Nigeria". Business combination (otherwise known as 'Mergers and Acquisitions') are as old as enterprises themselves. The motive behind any corporate entity in Business is growth, development and profitability. An economy under recession like Nigeria provides compelling reasons for corporate bodies to seek a 'Merger or/an Acquisition" with the hope that the combined enterprise will stand a better chance of weathering the storm further more, the harsh business climate of the structural adjustment programme has made mergers and acquisition inevitable. The purpose of this research work was to determine the corporate performance of mergers and acquisition, to assess the level of adequacy of information to investors etc. The Nigerian experience with mergers and acquisition is both recent and extremely limited. Therefore, a research work of this nature is of immense importance to the corporate bodies who have either engaged in merger and/or acquisition, and those who are yet to embark on such decisions. It is also of importance to the investing public, other students who may be interested in undertaking researches in related area (s), etc. The main hypothesis of this study as stated thus: Ho (Null hypothesis): - Mergers and Acquisition have no impact on corporate growth. Hi (Alternative hypothesis: - Mergers and Acquisition have impact on corporate growth. The methodology employed in this researched used Lever Brothers Nigeria plc as a case study because of the many mergers and acquisitions it has undertaken. The investigation was based on random sampling method, and the sample size used was eighty (80) respondents, which was made up of executive heads, middle level managers and other employees. The study also made use of primary data (questionnaires and personal interviews), and secondary data (books, journals, newspapers, unpublished works, theses and conference papers). The simple percentile statistical tool was used for the analysis of data. The main findings revealed that mergers and acquisition enhance diversification which has to do with market expansion, wider range of products and services. Merged or acquired companies have realized higher profits, reduction in operational costs, better staff welfare, increase in salary, improved technology, capability to respond more to the needs of the consumers and customers, etc. From the research therefore, Ho (Null hypothesis) was rejected and Hi (Alternative hypothesis) was accepted, which was concluded that mergers and acquisition have serious positive impact on the growth of corporate bodies in Nigeria. Based on the strategic posture of mergers and acquisition on business, and the impact on the shape of corporate bodies and the country's economy, some recommendations were made as follows: - that merger should be used as a survival and expansion strategy, and more companies should therefore be encouraged to participate in merger bids. Mergers and acquisition should also be used as one of the viable options for rescuing some of the distressed financial institutions, etc. The research work was divided into five (5) Chapters. Chapter one focused the introduction, purpose of the study, statement of the problem, significance, methodology, etc. chapter two concentrated on the theoretical framework, which looked into related literatures by various writers. For example, definitions, reasons for mergers and acquisition, examples of merged companies, etc. Chapter three on the other hand was specially devoted to lever brothers Nigeria plc as a case study organization, and the information gathered concerning its experience s on mergers and acquisition was tremendous. Chapter four dealt mainly with the presentation and analysis of data collected, the test of the hypothesis, findings and discussions, etc. Chapter five finally was used for summary of the entire research, conclusions drawn and some recommendations made.
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A PROJECT SUBMITTED TO THE POST - GRADUATE SCHOOL, AHMADU BELLO UNIVERSITY, ZARIA. IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTERS DEGREE IN BUSINESS ADMINISTRATION (MBA). DEPARTMENRT OF BUSINESS ADMINISTRASTION INSTITUTE OF ADMINISTRATION AHMADU BELLO UNIVERSITY, ZARIA. DECEMBER, 1998
Keywords
IMPACT,, MERGERS, ACQUISITION,, CORPORATE GROWTH, NIGERIA,, CASE STUDY,, LEVER BROTHERS,, NIGERIA, PLC.
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