The impact of merger and acquisition on selected companies trading in the Ghana Stock Exchange

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The study was carried out to find out the impact of merger and acquisition (A&A) on selected companies trading the Ghana Stock Exchange using quantitative and qualitative methods. The objectives of the study were:   1. To discuss the motivations behind mergers and acquisitions in Ghana. 2. To analyse the influence of mergers and acquisition on share prices. 3. To analyse the influence of mergers and acquisition on dividend payment. 4. To analyse the influence of mergers and acquisition on efficiency. 5. To make appropriate recommendations on the Mergers and Acquisitions in Ghana. The study revealed that there are varied motives for merger and acquisitions in Ghana. Among the common motives were identified as competitive business advantage, managerial # prestige and interest, diversification of business and expansion, reaping the gains of undervalued business and influence of professionals and experts. Again, it became obvious that the merger and acquisition per se do not necessarily ensure efficiency of business since share prices, dividend payment and return on asset ratio could be positive or negative depending oh how the business is managed. There are also challenges of management resistance to change as a result of the M and A, undervaluation and low assessment of acquired businesses to the advantage of the acquiring companies and short-run diminishing returns after the merger and acquisition. Companies considering merger and acquisition require possessing deep financial resources to be able to sustain the business during the M and A period. Management of M & A should also try to tie their personal objectives with that of their companies for a successful merger and acquisition. Again, focusing on strong core business after the M and A would help maximise good will and performances indicators. Relying on experience managers for the M and A transactions whiles avoiding merger of equals, integration of the target business within the acquirer's company, replace of managers for the new companies and mutual engagement and benefits of professional services for both the acquiring and acquired companies may greatly ensure successful merger and acquisition.
A Dissertation submitted to the Kwame Nkrumah University of Science and Technology School of Business, Kumasi, in partial fulfilment of the award of Executive Master of Business Administration (Banking and Finance) degree, 2008