IMPLICATION OF MERGERS AND ACQUISITIONS THEIR EFFECTS ON BANKS PERFORMANCE (A CASE STUDY OF UNITED BANK FOR AFRICA UBA). A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
This research work was aimed at determining the implication of mergers and acquisitions their effects on banks performance as regards to United Bank for Africa (UBA). In this study, the objectives of the researcher is to
Find Out the financial implications of mergers and acquisitions in Nigeria commercial bank sector. Whether mergers and acquisitions can solve the problem of financial insolvency. If there is any benefit to be derived from mergers and acquisitions whether survival, growth and benefits (ie profit maximization) commercial banking sector can only be achieved through mergers and acquisitions. Can mergers and acquisitions be a tool for performance evaluation. The researcher was a survey as stated. The instrument used was questionnaire. The data collected was analyzed and tabulated. The result revealed that banking sector in Nigeria could perform well,grow and maximize profit through mergers and acquisitions. Ideological problem may arise in setting organizational goals as a result of the fusion. There are some legal aspect attached to them which is based either on their economic effects or legal states. It also revealed that many shareholders has not knowledge of the impact of mergers and acquisitions. Above all, the researcher gave some recommendations, which would benefit the banking and all other investors if strictly adhered to.
1.1 BACKGROUND OF THE STUDY
The relevance of banks in the economy of any nation cannot be overemphasized. They are the cornerstones of the economy of a country. The economies of all market-oriented nations depend on the efficient operation of complex and delicately balance systems of money and credit. Banks are an indispensable element in these systems. They provide the bulk of the money supply as well as the primary means of facilitating the flow of credit.”
Consequently, it is submitted that the economic well being of a nation is a function of advancement and development of her banking industry (Obadan, 1997).
According to the value increasing school, mergers occur, broadly, because mergers generate ‘synergies’ between the acquirer and the target, and synergies, in turn, increases the value of the firm (Hitt et al., 2001). The theory of efficiency suggests that mergers will only occur when they are expected to generate enough realizable synergies to make the deal beneficial to both parties; it is the symmetric expectations of gains which results in a ‘friendly’ merger being proposed and accepted. If the gain in value to the target was not positive, it is suggested, the target firm’s owners would not sell or submit to the acquisition, and if the gains were negative to the bidders’ owners, the bidder would not complete the deal.