An Appraisal of Domestic Mergers and Acquisitions in Nigerian Banking Industry: Three-Year Pre and Post-mergers and Acquisition Event
Posted: 20 Oct 2020
Date Written: August 1, 2020
Abstract
The concept of mergers and acquisitions has been an interesting area of study in the literature of finance (Sharma, 2016). As a confirmatory study following extant literature, this paper examines empirically the impact of mergers and acquisitions (M&As) on the performance of banks involved in M&As in the Nigerian banking industry. With the aid of financial ratios and t-test, the post-merger performance of seven banks listed on the Nigerian Stock Exchange (NSE) that completed an M&A at a time (t0) 2005 was investigated. Selected accounting variables (financial ratios) were introduced to measure operating performance by making comparison of three-year pre, and three-year post-M&A firm performance, while the year of M&A event is omitted from comparisons as in extant studies (Leepsa & Mishra, 2013; Pazarskis et al. 2006). The study found that whereas, Nigerian banks were profitable post-M&A, the wholistic performance was found to be poor.
Keywords: Mergers and Aquisitions; Nigerian banks; financial ratios; t-test; Pre and post M&A
JEL Classification: G21;G28;G34;G33
Suggested Citation: Suggested Citation