Mergers and Acquisition: Vodafone GT Case

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Ghana has seen a far less number of mergers and acquisitions in the telecommunication sector over the past years as compared to the banking industry. The most prominent among them and of immense national interest was the Vodafone acquisition of Ghana Telecom (GT) but whether they have brought any significant change or the outcome has been ‘Value conserved’, ‘Value created’ or ‘Value destroyed’ to GT or Ghana economy makes it imperative to investigate in this area. This study examines the impact of mergers and acquisitions on the acquiring company’s corporate financial performance, within the Ghanaian economy, using Vodafone Ghana as case study. The issue was investigated using performance measure based on the company’s annual reports and a nonparametric test was carried out on the views of customers and staff in order to know the areas of improvements after the acquisition. The results of the study shows that the accounting performance has increase in some aspect and declined in others after the merger. There has being a downward fall in profitability performance. Sales growth increases during the post-mergers periods since it has the same trend with the pre-mergers period but much higher values in the post-mergers periods. Operating expense and financial leverage have been decreasing while liquidity has been on the rise and from the views of customers almost all areas have seen some improvements but the areas that have seen most improvements is the prices of products and services which has become cheaper and available to customers. To be able to attain merging objectives of achieving synergy, reducing cost of operations and improving market performance and profitability of the joint operations and other performance benefits, the company should strengthen its business processes, restructure its capital base and improve its cash operation cycle.
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfillment of the requirements for the degree of Commonwealth Executive Masters of Business Administration.