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| Mergers and Acquisitions as Strategy for Corporate Survival Evidence from the Nigerian Banking Sector |
Okoh Lucky Okuwa, Arukaroha Jonathan
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Abstract:
The global economic environment is dynamic and unpredictable. Enterprises operating in the troubled economies like Nigeria and other developing nations faced stiff competition from the companies in the developed economies that have adequate capital, infrastructures, technology, and technical know-how. Mergers and acquisitions in the Nigeria banking sector are reform strategies recently adopted to reposition the banking sector. These were done to achieve improved financial efficiency, forestall operational hard ships and expansion bottlenecks. The objectives of this study therefore, was to establish the motives behind corporate mergers and acquisitions, to examine whether mergers and acquisitions are ways of stemming the tide of persistent distress in the Nigerian banking sector as well as to investigate whether mergers and acquisitions are survival strategies for the banking sector in Nigeria. The method of data analysis included chi-square statistics and t-test statistic. The study found that mergers and acquisitions are ways of stemming the tide of persistent distress in the Nigerian banking sector. It also found mergers and acquisitions as survival strategies in the Nigerian banking sector before and after the consolidation policy. The study however, recommended that in adopting mergers and acquisitions as survival strategies, the board and management should endeavor to evolve detailed pos-merger or acquisition plan. The bank should be more pro-active in their approach by encouraging, promoting the productive sector of the economy with a view to diversifying the revenue base of the country. There is need to sensitize corporate organizations on mergers and acquisitions and its importance to their growth and survival. Government and its regulatory agencies should organize seminars, workshops, and symposia for corporate organizations. Government should provide the enabling environment for corporate organizations to operate and encourage mergers and acquisitions among enterprises and a host of other strategies for effective mergers and acquisitions.
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