Evaluation Of The Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Nigerian Firms (A Case Study Of Selected Quoted Companies)
ABSTRACT
Acquisition, mergers, consolidations, takeovers, amalgamation
and absorption are common concepts in the corporate world.
The subject matter of mergers and acquisitions emerged on the
Nigerian capital market scene in the 1980. Several reasons has
been given for mergers and acquisitions between firms which
includes; economies of scale, divers fication, reduction of tax
liability, increased market share etc. The issues involved in
merger economies, legal requirements and commercial
advantages of merger and acquisition were discussed in details
in this work. The problems of merger and its implication were
not left out. The objective of this work was primarily to evaluate
the effect of mergers and acquisitions on shareholders wealth
and consequently the share prices and also its effect on the
profitability of the firms. To achieve this, research questions and
hypothesis were formulated. The analytical technique employed
to answer such questions and justify the stated hypothesis was
the regression analysis. This was based on data from the
companies published accounts for a period of ten years. From
the results of the analysis, the value of the R2before the merger
was lesser than the one after merger, which gave rise to the
conclusion that mergers and acquisitions improve shareholders
wealth by increasing the market value of their shares and also
mergers and acquisitions increase profitability of the firms
which is evident in the increase in the Return on capital
Employed (ROCE). Finally, it was recommended that firms
should be encouraged to merge especially those at the verge of
liquidation and also the cost of acquisition and mergers should
be reduced so as to ensure the maximization of shareholders
wealth.
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ABAKWUO, M (2021). Evaluation Of The Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Nigerian Firms (A Case Study Of Selected Quoted Companies). Repository.mouau.edu.ng: Retrieved Nov 25, 2024, from https://repository.mouau.edu.ng/work/view/evaluation-of-the-effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-nigerian-firms-a-case-study-of-selected-quoted-companies-7-2
MATTHEW, ABAKWUO. "Evaluation Of The Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Nigerian Firms (A Case Study Of Selected Quoted Companies)" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 07 Jun. 2021, https://repository.mouau.edu.ng/work/view/evaluation-of-the-effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-nigerian-firms-a-case-study-of-selected-quoted-companies-7-2. Accessed 25 Nov. 2024.
MATTHEW, ABAKWUO. "Evaluation Of The Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Nigerian Firms (A Case Study Of Selected Quoted Companies)". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 07 Jun. 2021. Web. 25 Nov. 2024. < https://repository.mouau.edu.ng/work/view/evaluation-of-the-effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-nigerian-firms-a-case-study-of-selected-quoted-companies-7-2 >.
MATTHEW, ABAKWUO. "Evaluation Of The Effect Of Merger And Acquisition On Shareholders Wealth And Profitability Of Nigerian Firms (A Case Study Of Selected Quoted Companies)" Repository.mouau.edu.ng (2021). Accessed 25 Nov. 2024. https://repository.mouau.edu.ng/work/view/evaluation-of-the-effect-of-merger-and-acquisition-on-shareholders-wealth-and-profitability-of-nigerian-firms-a-case-study-of-selected-quoted-companies-7-2