The performance effect of mergers and acquisitions-the case of Guinness Ghana Breweries Group
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Date
2008-09-13
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Abstract
This work explores the effect of the consolidation between Guinness Ghana Limited and Ghana Breweries Limited on the financial performance of the new company, Guinness Ghana Breweries.
The study outlines the review of literature on mergers and acquisitions in general, which covers the impact of mergers and acquisitions on employment, shareholders, organizational culture and financial performance.
Further, financial statement of the individual companies as well as the group were for three years namely, 2003 ( a year prior to the merger), 2004 (the year of merger), and 2005 ( a year after the merger) and compared to ascertain the changes in financial ratios, either positive or negative, as a basis for assessing performance. The ratios analyzed include Profitability, Activity, Liquidity, Gearing and Shareholder.
To ascertain information necessary to generate the ratios analyzed include Profitability, Activity, Liquidity, Gearing and Shareholder.
To ascertain information necessary to generate the ratios, research findings of exiting works and annual reports of Guinness Ghana Limited covering 2003, 2004 and 2005 were used. The research revealed that the overall performance of Guinness Ghana Limited in aggregate terms was not enhanced after the integration.
Finally, suggestions and recommendations are made to guide prospective mergers and acquisitions to minimise the possibilities of failure.
Even though the consolidation is generally known to the public as a merger, it will be referred to as an acquisition based on the percentage shareholdings of Guinness Ghana Limited.
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A Thesis submitted to the Department of Marketing, KNUST In Partial fulfiliment of the requirement for the award of the Degree of Master of Business Administration in Strategic Management, School Of Business, 2008