Mergers and Acquisitions: The Trend in Business Environment in Nigeria

Abstract

This paper focused on merger and acquisition in Nigerian business environment. Its specific objectives are to determine implication of merger and acquisition on profitability, leverage buy- out and shareholders’ wealth. It is a longitudinal survey covering time period of six years (Pre-merger and acquisition: 2007-2009 and Post-merger and acquisition: 2010-2012). Historical data were obtained from the financial statement and accounts of Access Bank PLC which merged with Intercontinental Bank PLC. Data collected are evaluated and analysed using McNemar test. This study reveals that merger and acquisition has influence on profitability, leverage buy-out and shareholders’ wealth. It concluded that merger and acquisition can stimulate economic growth and development of any nation. Hence, recommended that merger and acquisition should be strategically be employed by firms to improve profitability, shareholders wealth and offset accumulated leverage for the interest of dispersed stakeholders and government should create the enabling environment that can enhance merger and acquisition in Nigeria.