All these caused great distortion in the financial system resulting to financing inefficiency which made investors not to get constant in high dividend as a result of inefficiency in terms of gross earnings, profit after tax and net assets.
The need to carryout the research is permeated by under capitalization, decline in profitability and poor investment potentials. On the impact of merger and acquisition in the banking industry and in economic growth kaur and kaur noted that mergers and acquisition in the banking industry are aimed at achieving economies of scale and scope.
We saw this in the oil industry in Nigeria in and Given high fixed costs, the new price was below average total cost, resulting in a loss. However, economic dilution must prevail towards accounting dilution when making the choice.
Is the act of joining two or more organizations or businesses into one. Tables below shows a thorough breakdown of the merger and acquisition of Nigerian banks that have taken place since the tenure of Professor Charles Soludo to the incumbent CBN Governor, Mallam Sanusi Lamido Sanusi which saw the previous 89 banks beforecoming down to This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit margins.
Keep one name and demote the other. Decisions about what brand equity to write off are not inconsequential. This is very important especially in horizontal mergers—merger between companies in the same line of business.
Vertical integration occurs when an upstream and downstream firm merge or one acquires the other.
A common example of such an externality is double marginalization. In recent years, these types of acquisitions have become common in the technology industry, where major web companies such as FacebookTwitterand Yahoo!
In part due to competitors as mentioned above, and in part due to the government, however, many of these initially successful mergers were eventually dismantled. Access to hidden or nonperforming assets land, real estate.
However, these prices set by cartels provided only a short-term solution because cartel members would cheat on each other by setting a lower price than the price set by the cartel.
Olaguna and obademi noted that different organization adopt different strategies such as internal reorganization, external reconstruction and so on, they consider appropriate to overcome these pressure and meet stakeholder expectations. The Great Merger Movement:merger and acquisition of nigerian banks – its impact on the nigeria banking industry.
On the impact of merger and acquisition in the banking industry and in economic growth kaur and kaur () noted that mergers and acquisition in the banking industry are aimed at achieving economies of scale and scope. Merger and acquisition which was popular introduce by Soludo () was a tool use to enforce, to ensure the survived of banks in Nigeria, which have works very well in the Nigeria banking.
MERGERS AND ACQUISITIONS IN THE NIGERIAN BANKING SYSTEM: ISSUES AND CHALLENGES BY banks, namely: Intercontinental Bank Plc, Oceanic Bank Plc, Union Bank of Nigeria Plc, Finbank Plc and Equitorial Trust Bank Plc got the. 3 The terms mergers and acquisition shall be used.
This paper fills a gap in the literature by investigating the effects of mergers and acquisitions on the efficiency, growth and profitability of corporate organizations in the post consolidated environment of the Nigerian banking industry.
Table 1 shows successful mergers in Nigeria from to Table 2 shows successful merger in the banking industry in There are other successful mergers in Nigeria from to-date. Meaning of Mergers, Acquisitions and Consolidation The terminologies, ‘Merger, Acquisition and Consolidation’ often cause confusion in the minds of people.
2. To identify the motives behind corporate merger and acquisition. 3. To investigate the impact of merger and acquisition on bank efficiency. Research questions The study would examine the following questions: 1. What are the structural implications of bank merger and acquisition?
2. What are the motives behind bank merger and acquisition? 3.Download