Vol: 3, Issue: 3 2013

Page: 40-50

Impacts of Mergers and Acquisitions on Company Performance: Evidence from Nigeria

P.O Yabugbe

The history of Nigerian companies is replete with instances where companies have collapsed for reasons of inadequate capital base, ineffective management, operational inefficiency, low return on investment, fraud by top management, and low plant utilization. Today, organizations endeavour to find solutions to these problems by adopting survival strategies which predominantly involve mergers and acquisitions. It is necessary in the circumstance to find out the situation with Nigerian companies. The objective of this research is to examine the impact of mergers and acquisitions (M&As) on company performance in Nigeria. In carrying out this study, the merger of Total Nigeria Plc and ELF Oil Marketing Nigeria Ltd was selected as case study. The methodology adopted was using Altman’s Z score model to affirm whether or not the strategy added value to the organizations. The finding of this study was that mergers and acquisitions tremendously improved the overall performances of the companies. The study concluded that mergers and acquisitions are appropriate and cheap platforms to “grow” companies and ensure their survival provided that the companies are in the same or related business.