Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Companies In Nigeria. Case Study (First City Monument Bank Plc)
Abstract
Banks' recapitalization is based on a belief that gains can accrue through expense reduction, increased market power, reduced earnings volatility, and scale and scope economies. However, whether or not merger and acquisition scheme, widely employed by banks in Nigeria during the recapitalization exercise between 2004 and 2005, actually assist in realizing the expected gains is the basis of this research work. Thus, the hypothesis that bank merger and acquisition does not affect the shareholders wealth and profitabilities of companies in Nigeria was tested using the test-statistical tool (t-test). To achieve this objective, the study specifically compared pre-merger against post-merger of shareholder's networth, total asset and profit after tax. Secondary source of data was collected from the published and audited financial statements of First City Monument Bank pie,which was analyzed using the t-test techniques. The study found out that pre-merger and post-merger has significant difference on shareholders networth and total asset while pre-merger and post-merger profit after tax has no significant difference. The study therefore recommends that merger and acquisition should be embraced to take advantage of synergy, expertise, in addition to capital contribution by banks in Nigeria, also a functional internal control system should be established in order to prevent the incidence of fraud and other anomalies in the banking system.
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IGBOANUGO, J (2021). Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Companies In Nigeria. Case Study (First City Monument Bank Plc). Repository.mouau.edu.ng: Retrieved Sep 20, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-companies-in-nigeria-case-study-first-city-monument-bank-plc-7-2
JOSIAH, IGBOANUGO. "Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Companies In Nigeria. Case Study (First City Monument Bank Plc)" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 09 Mar. 2021, https://repository.mouau.edu.ng/work/view/effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-companies-in-nigeria-case-study-first-city-monument-bank-plc-7-2. Accessed 20 Sep. 2024.
JOSIAH, IGBOANUGO. "Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Companies In Nigeria. Case Study (First City Monument Bank Plc)". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 09 Mar. 2021. Web. 20 Sep. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-companies-in-nigeria-case-study-first-city-monument-bank-plc-7-2 >.
JOSIAH, IGBOANUGO. "Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Companies In Nigeria. Case Study (First City Monument Bank Plc)" Repository.mouau.edu.ng (2021). Accessed 20 Sep. 2024. https://repository.mouau.edu.ng/work/view/effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-companies-in-nigeria-case-study-first-city-monument-bank-plc-7-2