ABSTRACT
The study determined the Impact of mergers and acquisition on the performance of banks in Nigeria, the specific objectives are to evaluate the impact of merger and acquisition on return on asset and return on equity, the study adopted ex post facto research design and extracted data from cross section of banks over a period 10 years. Capital adequacy ratio and firm size were jointly used as proxies for merger and acquisition and served as joint in dependent variable while return on asset and return on equity were each employed on a 2 model framework. Based on the nature of data extracted, the panel least squares method of data analysis was engaged to investigate the relationship of the variables. The result of the 2 models provided evidence for the selection of the random effect regression. It was found that mergers and acquisition have significant effect on both return on asset and return on equity. The study therefore concludes that mergers and acquisition significantly affects performance of banks and recommends that management of banks should ensure that an appropriate capital adequacy ratio is maintained to cover loans and advances granted so as to increase return on assets. Management of banks should endeavor to retain sufficient earning so as to increase shareholders wealth.
TABLE OF CONTENTS.
Titlepage
Declaration
Certification
Dedication ··
Acknowledgements
Table of contents
List of tables ·
Abstract
CHAPTER ONE: INTRODUCTION
1.1 Background to the study 1
l.2 Statement ofproblem 3
1.3 Objectives of the study 4
4.1 Research questions 4
l .5Statemerit of hypotheses .4
1.6 Significance of the study 5
L6J Financial Institutions 5
1.6.2 Management ··
1.6.3 Students 5
1.6.4 Researchers. 6
1.6:s Investors 6
1.6.6 . Central Bank of Nigeria ·. 6
L7Scope of the study 6
1.8 Limitation of the study 6
CHAPTERTWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 7
2.1.1 Meaning of Merger and Acquisition 7
2.1.2 Types of Merger and Acquisition 10
2.1.3 Motives of Merger and Acquisition 11
2.1.3.1 Shareholder Gains
2.1.3.2 Efficiency gains
2.1.3.3 Economies of scale
2.1.3.4 Economies of scope
2.1.3.5 Economies of vertical integration 15
2.1.3.6 Synergy gains 15
2.1.3.7 Diffusion of know-how 16
2.1.3.8 R&D 16
2.1.3.9 Cost savings 17
2.1.3.10 Rationalization 17
2.1.3.11 Purchasing power 18
2.1.3.12 Creating internal capital markets 19
2.1.3.13 Financial cost savings 19
2.1.3 .14 Taxes 20
2.1.3.15 Interest rates 20
2.1.3.16 Diversification 21
2.1.3.17 Enhancement or strengthen of market power 21
2.1.3.18 To raise entry barriers 22
2.1.3.19 To spread portfolio 22
2.1.3.20 To obtain multimarket contact 23
2.1.4 Stages of Approval for Mergers and Acquisitions 24
2.1.4.1. Pre-merger consent 24
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 7
2.1.1 Meaning of Merger and Acquisition 7
2.1.2 Types of Merger and Acquisition 10
~.1.3 Motives of Merger and Acquisition 11
2.1.3.1 Shareholder Gains
2.1.3.2 Efficiency gains
2.1.3.3 Economies of scale
2.1.3.4 Economies of scope
2.1.3.5 Economies of vertical integration 15
2.1.3.6 Synergy gains 15
2.1.3.7 Diffusion of know-how 16
2.1.3.8 R&D 16
2.1.3.9 Cost savings 17
2.1.3.10 Rationalization 17
2.1.3.11 Purchasing power 18
2.1.3.12 Creating internal capital markets 19
2.1.3.13 Financial cost savings 19
2.1.3.14 Taxes 20
2.1.3.15 Interest rates 20
2.1.3.16 Diversification 21
2.1.3.17 Enhancement or strengthen of market power 21
2.1.3.18 To raise entry barriers 22
2.1.3.19 To spread portfolio 22
2.1.3.20 To obtain multimarket contact 23
2.1.4 Stages of Approval for Mergers and Acquisitions 24
2.1.4. l. Pre-merger consent 24
CHAPTER THREE: METHODOLOGY
3.1 Research design 41
3.2 Area of the study 41
3.3 Population for the study 42
3.4 Sampling technique 43
3.5 Method of data collection 43
3 .6 Method of data analysis 43
3.7 Model specification 44
CHAPTER FOUR: DATA PRESENTATION, RESULTS AND DISCUSSION
4.1. Data presentation 46
4.2. Analysis and discussion of unit root test 46
4.3. Results and discussion 47
4,3.1 Impact of Mergers and Acquisition on Return on Assets ok Banks. 47
4,3.2. Impact of Mergers and Acquisition on Return on Equity 52
4.4. Hypotheses Testing 57
4.4.1. Test of Hypothesis One 57
4.4.2. Test of Hypothesis Two 58
CHAPTER FIVE: SUMMARY
RECOMMENDATIONS OF FINDINGS, CONCLUSION AND
5.1. Summaryof findings 59
5.2. Conclusion 60
5 .3. Recommendations 62
REFERENCES
UKEJE, M (2020). Impact Of Merger And Acquisition On Performance Of Banks In Nigeria (A Study Of Selected Banks). Mouau.afribary.org: Retrieved Oct 30, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-performance-of-banks-in-nigeria-a-study-of-selected-banks
MOUAU/ACC/14/23998, UKEJE. "Impact Of Merger And Acquisition On Performance Of Banks In Nigeria (A Study Of Selected Banks)" Mouau.afribary.org. Mouau.afribary.org, 10 Jun. 2020, https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-performance-of-banks-in-nigeria-a-study-of-selected-banks. Accessed 30 Oct. 2024.
MOUAU/ACC/14/23998, UKEJE. "Impact Of Merger And Acquisition On Performance Of Banks In Nigeria (A Study Of Selected Banks)". Mouau.afribary.org, Mouau.afribary.org, 10 Jun. 2020. Web. 30 Oct. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-performance-of-banks-in-nigeria-a-study-of-selected-banks >.
MOUAU/ACC/14/23998, UKEJE. "Impact Of Merger And Acquisition On Performance Of Banks In Nigeria (A Study Of Selected Banks)" Mouau.afribary.org (2020). Accessed 30 Oct. 2024. https://repository.mouau.edu.ng/work/view/impact-of-merger-and-acquisition-on-performance-of-banks-in-nigeria-a-study-of-selected-banks