MERGERS AND ACQUISITIONS A TOOL FOR BETTER CORPORATE PERFORMANCE (A Case Study of UBA Group Nigeria Plc)

  • 0 Review(s)

Product Category: Projects

Product Code: 00000439

No of Pages: 106

No of Chapters: 5

File Format: Microsoft Word

Price :

₦3000

 

ABSTRACT

The objectives of this project was predominantly focused on the investigation of mergers and acquisitions as a tool for a better corporate performance in United Bank for African PLC (UBA).

 

In this research work, several literatures related to the topic of research were reviewed.

 

The research work was carried out using primary data by the distribution of questionnaires to respondents.

 

With the use of data collected, chi-square was used in the hypothesis testing, null hypothesis (Ho) was accepted in the test I and 2. In the former: merger and acquisitions are not tools for a better corporate performance. While in the latter: merger acquisitions will not create a sound financial stabilities and global competitiveness in the banking industry.     

 

Based on the findings, summary and conclusion was drawn that merger and acquisition brought a lot of set backs in UBA and in the banking industry as a whole i.e it did more harm than good.  Recommendations and suggestions for further studies were finally made. 

 

     

TABLE OF CONTENT

Page 

Title Page

Certification                                                                                     i

Dedication                                                                              ii

Acknowledgment                                                                             iii 

Abstract                                                                                           iv

Table of Content                                                                     v

 

CHAPTER ONE:  INTRODUCTION  

1.0    Background of Study                                                            1

1.1    Statement of Problem                                                            4

1.2    Research Hypothesis                                                             4

1.3    Objective of Study                                                                  6

1.4    Significance of the Study                                                       6

1.5    Scope of the Study                                                                 7

1.6    Limitations of the Study                                                        7

1.7    Definitions of Terms                                                               8

1.8    Historical Background of UBA Group Nigeria Plc               9

1.9    Study Outlines                                                                       10

 

CHAPTER TWO: LITERATURE REVIEW                                      

2.0    Introduction                                                                           13

2.1    Overview of the Concept of Mergers and Acquisition 14

2.2    Merger and Acquisition Process                                           17

2.3    Consideration Motivating Bank Executives to Agree

          on Acquisition and Merger                                                    19

2.4       Merger and Acquisition a Survival Strategy in a

Depressed Economy                                                              21

2.5       A Brief History of UBA Mergers                                            24

2.6       Theoretical Background                                                        30

2.7       General Overview of the Nigerian Banking Industry

before the Consolidation Programme                                   32

2.8       The Effect of Merger and Acquisition on Contract of

Employment                                                                           34

2.9       Influence of Corporate Atmosphere on Mergers and

Acquisitions                                                                           38

2.10    Modes of Bank Mergers                                                        47

2.11    Source of Value in Bank Merger                                           49

2.12    Pitfalls and Risks in Bank Merger                                        52

2.13    Valuation Bank Merger                                                         53

2.14    Efficacy of Merger and Acquisition for Bank Distress         53

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.1       Introduction                                                                           61

3.2       Research Design                                                                    61

3.3       Sample and Sample Procedure                                            62

3.4       Instrument and Validation                                                    62

3.5       Data Collection Procedures                                                  63

3.6       Method of Data Analysis                                                       64

3.7       Limitation of Study                                                                66

 

 

 

 

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.0    Introduction                                                                           68

4.1    Testing of Hypothesis                                                             72

4.2    Interpretation                                                                         75

4.3    Discussion of Results                                                            79

4.4    Economic of Scale                                                                  80

4.5    Human Resources Issues                                                     81

4.6    Training and Manpower Development                                 82

4.7    Use of Information and Communication Technology 83

 

CHAPTER FIVE:  SUMMARY, CONCLUSION AND RECOMMENDATIONS 

5.0    Introduction                                                                           85

5.1    Conclusion                                                                             86

5.2    Recommendations                                                                 87

5.3    Suggestions for Further Studies                                           88

Bibliography                                                                           89    

Appendix

   

         

 

             

 

 

CHAPTER ONE

INTRODUCTION

1.0       BACKGROUND OF THE STUDY

The banking industry in Nigeria has been undergoing serious structural adjustments over the past two years arising from the Central Bank of Nigeria requirements for banks to increase their shareholders fund to a minimum level of N25 billion (Twenty five billion naira). This triggered off several mergers and acquisitions that have reduced the number of banks from 89 to 25 as at the beginning of 2006 which has increased to about 56 as at the end of last quarter in 2007.

 

Before the consolidation exercise started, the banking industry had about 89 active players whose overall performance led to sagging of customer confidence. There was lingering distress in the industry, the supervisory structures were in adequate, they were cases of official recklessness amongst the managers, and the industry was notorious for ethical abuses, poor corporate governance was identified as one of the major factors in virtually all known instances of bank distress in the country.

The Central Bank of Nigeria (CBN), in July 2004 unveiled new banking guidelines designed to consolidate and restructure the industry through merger, and acquisitions. The CBN’s action was also designed to make Nigeria Banks more competitive and to be able to play in the global market. However, successful operation in the global market requires accountability, transparency and respect for the rule of law. This is the big challenge that any Nigerian Organisation that wants to play in the global market will have to face and this is the basis for any good corporate governance.

The main motivation behind consolidation is to maximize shareholders value. Value may be maximized though mergers and Acquisitions (M&As) mainly by increasing the participating firm’s market power in setting prices or by improving their efficiency and, in some cases, by increasing their access to the safety net.

Imala (2005) identified eight reasons for M & AS in the financial services sector. They include:

·                    Cost savings, attribute to economic of scale as well as more efficient allocation of resources.

·                    Revenue enhancement, resulting from the impact of consolidation on bank size, scope and overall market power;

·                    Risk reduction, due to change in organisational focus and efficient organisational structure;

·                    New developments, which impose high fixed costs and the need to spread these costs across a large customer base;

·                    The advant of deregulation, which removed many important legal and regulatory barriers;

·                    Globalization which engender a more globally integrated financial services industry and facilitated the provides on wholesale financial services and geographically expansion of banking operations;

·                    Financially Stability, characterized by the smooth functioning of various components of the financial system, with each component resilient to shock;

·                    Shareholder pressure on management to improve profit margins and reform on investment made possible by new and powerful shareholder blocks.


1.1    STATEMENT OF THE PROBLEM

Merger and acquisition has been an interesting topic in the business world, in spite of the numerous advantages advanced in favour of Merger and acquisition, much viable business. Concern is skeptical about merging or acquiring other businesses.

The problem, which necessitated this study, includes;

(i)           Mergers and acquisitions are complex and they also involve huge capital spending.

(ii)          The discouragement of Mergers and acquisitions by individual, shareholders and trade union.

(iii)        Effect of Merger and acquisition not always successful

(iv)        Why Mergers and acquisition not always successful

 

1.2    RESEARCH HYPOTHESIS            

Hypothesis is conjectural statement, which a researcher draws up to assist in achieving the aims and objectives of the researcher efforts.

The hypotheses so formulated are put forward for testing and it supported by the facts and figures obtained from the study. The hypothesis can be identified as the Null Hypothesis and Alternative hypothesis. 

 

Ho:    There are no differences between two variables being compared. 

Hi:     There are differences between the two variables compared.       

H20:  Mergers and acquisitions will not create a sound financial stability and global competitiveness in the banking industry.

H21:  Mergers and acquisitions will create a sound financial stability and global competitiveness in the banking industry.

H30:  Mergers and acquisitions are not better tools for corporate performance.

H31:  Mergers and acquisitions are better tools for corporate performance. In all, the acceptance.    

The acceptance of the null hypothesis automatically means the rejection of the alternative hypothesis and vice-versa.

 

1.3       OBJECTIVE OF THE STUDY 

The main goal of this study is to disabuse the minds of top executives, investors and major decision makers in the organisation from pre-conceived ideas and in-genuine fear regarding merger and acquisition. Another area of focus of this study is on the following aspects:

(i)           As a means of business survival

(ii)          To realize the benefit of Mergers and acquisition in Nigeria’s economic development.

(iii)        To consider the option of Merger as a saving rather than folding up.

(iv)        Proffer practicable solution as to the problem areas of merger and acquisition and recommending it as a viable option amongst other option in the business environment.

 

1.4       SIGNIFICANCE OF THE STUDY  

The research project will be significant to the following:

(i)           Students preparing for various professional examination and those of higher institution of leavening.

(ii)          To the financial analyst

(iii)        To the government

(iv)        It will act as a guide for firms seeking for mergers and acquisition

(v)          It will act as a tool for assessing the growth in performance of merged banks.

 

1.5    SCOPE OF THE STUDY  

The scope of this research work includes textbooks, seminar papers, journals and other expert’s literature on Merger and acquisition and financial management. This project will form a very logical conclusion on Mergers and acquisitions. A tool for better corporate performance using UBA group as a case study.

 

1.6    LIMITATION OF THE STUDY              

The researcher met with some difficulty such as academic demand, transportation problem and financial constraint serve as limitations to the study. But all these will not significantly affect the result of this study.

 


1.7    DEFINITIONS OF TERMS       

·                    Merger: This is simply exchange of voting share by the shareholders of the companies in order to achieve uniting of interest (i.e synergy objectives).

·                    Amalgamation: This is the formation of an entirely new company to acquire the net assets of two or more separate companies that been wind up for that purpose.

·                    Acquisition: A company acquires all the assets and liabilities of another company in other to become a new owner.

·                    Take over: This is a situation where the majority of equity shares of a problematic company is taken over by another healthy company.

·                    Consolidation: Is to make ones position of power stronger and more likely to continue or maintain the same level of achievement, profit and success.

·                    Profitability: Is the state of producing a profit the degree to which a business or activities are profitable.

·                    Corporate: Forms a single group or belonging to or connected with a business.

·                    Share/Stock: Is a unit of ownership in a business organisation.

 

1.8       HISTORICAL BACKGROUND OF UBA GROUP NIG. PLC

United Bank for Africa Plc (UBA) is the product of the Merger of Nigeria’s third (3rd) and fifth (5th) Largest banks namely the old UBA and erstwhile Standard Trust Bank Plc (STB) respectively, and a subsequent acquisition of the erstwhile Continental Trust Bank Limited (CTB). The Union emerged as the first corporate combination in the industry of Nigeria banking.

 

The history of the founding of the old UBA dated back in the year 1946 and the erstwhile STB and CTB both in 1990. Although today’s UBA emerged at a time of history consolidation induced by regulation the consolidated UBA was borne out of a desire to lead the domestic sector to a new era of global relevance by championing the creation of the Nigerian Consumer finance market leading a private/public sector partnership at supporting the acceleration of Nigeria’s economic development, and growing the institution from a banking to a one-stop financial foot prints as the face of banking in the continent.

UBA just recently acquired liberty Bank, the presence of Mr. Tony Elumelu an Economist and a financial guru as the Group Managing Director is a big plus to the growth and progress of the new UBA.     

 

1.9    STUDY OUTLINES

          This study shall be divided, into five chapters.

Chapter one consists of the introduction of subject matter i.e mergers and acquisition of tool for corporate performance (using UBA Group of Nigeria Ltd as case study).

Chapter two is essentially on literature review of the subject matter.

Chapter three focuses on Research Methodology and design. In this chapter, primary data collection method was used by distribution of questionnaires to targeted audience through structural and unstructured interviews.

Chapter four deals with data presentation and analysis. It consists of data obtained in the questionnaires shared to all level of staff in UBA group. Two hypothesis where tested with the use of chi-square and each was tested at 95%.

 

While chapter five should consist the summary of major findings of the study. It is a brief collection of all relevant facts that underline the project. In this chapter, conclusion is made base on imperical findings as well as recommendations and suggestions.                  

Buyers has the right to create dispute within seven (7) days of purchase for 100% refund request when you experience issue with the file received. 

Dispute can only be created when you receive a corrupt file, a wrong file or irregularities in the table of contents and content of the file you received. 

ProjectShelve.com shall either provide the appropriate file within 48hrs or send refund excluding your bank transaction charges. Term and Conditions are applied.

Buyers are expected to confirm that the material you are paying for is available on our website ProjectShelve.com and you have selected the right material, you have also gone through the preliminary pages and it interests you before payment. DO NOT MAKE BANK PAYMENT IF YOUR TOPIC IS NOT ON THE WEBSITE.

In case of payment for a material not available on ProjectShelve.com, the management of ProjectShelve.com has the right to keep your money until you send a topic that is available on our website within 48 hours.

You cannot change topic after receiving material of the topic you ordered and paid for.

Ratings & Reviews

0.0

No Review Found.


To Review


To Comment