Impact of mergers and acquisitions on banks' performance in Ghana.
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Date
2016-06
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KNUST
Abstract
ABSTRACT
Due to increasing competition, new financing possibilities and changes in regulation all over
the world, mergers and acquisitions (M&A) have become popular strategic tools for
growth. Every merger or acquisition, whether large or small, has inherent complexities that
need to be clearly understood and properly addressed to ensure that value is created. Due to
globalization and expansion of economies, firms will have to consolidate to be able to compete
on international scale and be able to undertake big ticketing transactions. Some sectors such as
finance, telecommunication and petroleum have been transformed since 1994 by the occurrence
of very large-scale mergers and acquisitions. The larger the economy, the more likely to have
more companies that could merge with each other and this creates a rippling effect which
improves the economy. As such developing countries, of which Ghana is no exception, are
now embracing the concept of pursuing acquisitions and mergers as a means of sustainable
growth.
This study analyzes beyond a single case study as it assessed the mergers of Ecobank Ghana
and The Trust Bank (TTB), SocieteGenerale and SG SSB and Access bank and
Intercontinental bank to evaluate whether the mergers of these groups has led to improvement
in their performance. A financial analysis of the three merged banks before and after the
merger was undertaken in this study to ascertain whether the merger has made the group
better off than operating individually.
Data were collected from the published annual reports and accounts of the selected banks
and were subsequently uses STATA and Statistical Package for Social Sciences (SPSS) for the
data analysis t-test statistics through statistical package for social sciences. It was found
that the post-mergers and acquisitions‟ period was more financially efficient than the premergers and acquisitions period.
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However, to increase banks financial efficiency, the study recommend that banks should
be more aggressive in their profit drive for improved financial position to reap the benefit of
post mergers and acquisitions bid.
Description
Thesis submitted to the Department of Economics of the College of Social Sciences and Humanities, Kwame Nkrumah University of Science and Technology, in partial fulfillment
of the requirements for the award of a master of Science degree in Economics.