ABSTRACT

This paper gives an overview of effects of mergers and acquisition on the performance of banks in Nigeria. It examines the reason for Merger and acquisition which includes, diversification of risk, synergy, and inefficient management. Economic of scale etc and the reasons for its failure like too high premium, culture clash, poor business fit, managements failure to integrate etc. The purpose of this study seeks specifically to investigate relationship between bank size and bank performance, identify factors that necessitated mergers and acquisition of banks in Nigeria, and determine the existence of significant difference between pre and post-merger shareholders wealth. The study adopts a combination of survey research design and longitudinal design, five year financial statements. for pre and post merger period were collected from the consolidated banks in study. This was complemented with survey data on the selected research question relevant to the topic under study obtained from 132 respondents using researched designed questionnaire validated by experts correlation and T- Test techniques were used to analyse the date, our result reveals five causative factors, 6(six,) effects and 4 justification for merger and acquisition of banks in Nigeria. With mean scores above the acceptable mean score of 2.5 on the scale respectively. The correlation results Ho1 and Ho2 (A and B) indicates for Ho 1 a strong positive relationship between bank size and Bank performance at 0.01 level of significant, Ho2 a indicates also a positive relationship between pre and post merge- profitability performance of banks (using profit after tax, loans and advances) at 0.01 level of significant and Ho2B (using profit after tax and total assets) at 0.05 level. Ho3 indicate a strong relationship significant difference between pie and post merger performance of consolidated bank Nigeria. The study therefore concludes that explicating who the dominant partner is, refocusing the strategic fit for the merging entities, avoidance of the conqueror syndrome are all geared towards strategies for a successful merger and acquisition of banks in Nigeria.