THE USE OF MERGER & ACQUISITION AS A GROWTH AND SURVIVAL STRATEGY IN A DEPRESSED ECONOMY

ABSTRACT

The Nigeria business climate has been adjustment by expect as one of the hostile, turbulent and volatile and vet challenging. It stands to reason, therefore, that for tangible success or survival (as the case may be ) to be recorded the active player must know his onion, be acquainted with the train of the Nigeria economy  and be able  to interpret accurately the hand writing of the inter playing force in the economy, some of which have taken renown financial analysts to their wits end. The volatility and vulnerability of the national economy, complete with fragment changes in government policies and legit ration have under accurate fore cast as a vital management tool an economic mirage. Unfortunately through as the situation may seen it offers the “wise group’’ both corporate and individual to prove its mettle when chips are down. The concept of merger and acquisition, which is the theme of the study is contemporary and throw up of many unfolding challenges of Nigeria depressed economy as the wise group of business companies scheme not only to stay afloat but also to flourish.

CHAPTER ONE

1.0     INTRODUCTION

Growth is necessary to determine the performance and continual of any business organization. Without growth, a business can hardly attract good management to itself. The use of merger and acquisition as a growth and survival strategy in a depressed economy like ours appears to be on the increase in recent times. This is not surprising, considering the large number of business failures and foul-ups as result of advise micro and macro economic climate. In the face of such hostile business climate , however, some business organization that belongs to the “wise group’’ started thinking of how to pull their resource together by the way of merger and acquisition as a survival cum growth strategy. Business merger and acquisition has played  ad important role in the growth and survival of many firms in Europe, USA, and Nigeria. But  before venturing into such a gargantuan adventure, financial managers should view it as organization or employers.

1.1  STATEMENT OF PROBLEM

In the high of the confusion and tumults of the modern business environment globally, some firms have flooded up while other only managed to keep afloat. It is but interesting to observe that in the midst of such unfavorable business environment, some enterprises do not merely survive but post super profit. The logical question is what factors could account for the divergent fortunes  of some firm of identical size and status in the same industry and operating in the same economy?  While not pretending to have all the answers, I make bold to state, that business merger and acquisition has become one of the fashionable surviving strategy for many companies. It is therefore, the intension of the study to investigate the effect merger and acquisition on the performance some selected companies in Nigeria. Further more the study will also seek to establish any possible relationship as otherwise between profitability of a company or increase in its earning per share and its merger and or acquisition scheme. At this junction, it may be pertinent to acknowledge the view of some expects that many business fusion and acquisition had often resulted in disappointment, as the profit level of the business organization took a nose dive.

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