Assessing the effects of Mergers and Acquisitions on the performance of a company: A Case Study of Guinness Ghana Breweries Limited

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JULY, 2015
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The study investigated mergers and its effect on performance using Guinness Ghana Breweries Limited (GGBL) as a case study. The study was descriptive using both primary and secondary sources. Data was collected using questionnaires. The study period involved five year before merger of the two companies GGL and GBL; and five years post-merger performance of GGBL. The study found that the financial performance of GGBL has been improving over the years as a result of the merger. Factors contributing to this performance include frequent supply of raw materials, high commitment of employees, proper allocation and strategic management of finance, and effective marketing approach and improved sales. In addition, joint expertise, increased shares, increase assets/equipment and increased labour has affected the current performance of GGBL positively after the merger (GBL and GGL). The study revealed that the merger process faced challenges ranging from cost of acquisition, regulatory compliance, IT integration, rebranding to HR integration. It was however established that the most significant challenge appeared to be compliance to regulatory procedure that accompanied the process of merger and acquisition. Various motives were identified to include: increasing shareholder value, improving efficiency, increasing market power, and as an entry strategy. The strongest motivation was however found to be the increase in shareholder value. Key recommendations included the need for the sales and marketing departments to focus on brands, which are high in demand and also adopt aggressive marketing strategies to grow the market as competition increases.
A thesis submitted to the Department of Accounting and Finance of the Kwame Nkrumah University of Science and Technology in Partial fulfillment of the requirements for the degree of Master of Business Administration (Finance)