facility management

Topic: Impact of Mergers and Acquisitions in Financial Performances of Companies
Abstract
This study tests the impacts of merger and acquisition in the global finance industry and provides
understandings of the merger’s role on profitability.
Chapter 1: Introduction
• General Description
A merger can be described as combining two or more organizations through purchase acquisition
where one of the organization’s identity remains as the others are dissolved. The main reasons for
mergers and acquisitions are increasing revenues, risk and product diversifications, gaining
market share and competitive advantage.
• Significance of the Problem
The study is significant to stakeholders, investors, and firms in understanding the significance of
mergers and acquisitions in analyzing organization performance.
• Analysis of Theoretical Basis of the Study
The study analyzed ten banks as samples for the analysis with three-year pre-merger and
three-year post-merger data points taken for all ten cases and compared their averages.
• Problem Statement
The problem addressed in the study is the impact of merger and acquisition on the financial
industry’s financial performance.
• Research Questions Do mergers or acquisitions influence the financial performance of banks?
Does the financial performance improve after merger and acquisition of banks?
• Hypothesis
H0= Merger and acquisitions do not influence the financial performance of banks.
H1= Merger and acquisitions impact the financial performance of banks.
Chapter 2 Literature Review
• Background
The literature reviewed the effects of mergers and acquisitions on organisations’ financial
performances by reviewing both empirical and theoretical literature.
• Relevant Theory to the Hypothesis
Organizations perform mergers or acquisitions of companies to create value more than the sum
of separate firms.
• Empirical Literature
Various studies have been performed on mergers and acquisitions but only depend on available
information.
Chapter 3 Methodology
• Participants
The study used a sample of ten different banks that have either merged or acquired.
• VariablesThe variables used in the study are dependent variables when merger and acquisition take place
while the independent variable is the financial performance of banks.
• Research Design
The study is causal and correlational. It is causal determined by whether the transition in the
profitability of the organizations are caused by business combination while it is correlational if it
seeks to understand the relationship of mergers and acquisitions to the financial performances of
the companies.
• Procedure
The study tested the ore-merger and post-merger data for normality tests. It also applied the
Wilcoxon sign rank test to compare the average values of pre and after the merger.
Chapter 4 Results
The average value of profit pre-merger is negative, while post-merger was positive. The average
value of return on asset, deposit and leverage increases after the merger.
Chapter 5 Conclusion
The study concludes that there is a relationship between merger and acquisitions and the
financial performances of organizations.
• Limitations
Unavailability of financial reports of banks before the merger or acquisition.
• Recommendation for Future ResearchThe study should be done for more organizations in the future with the revolution in the
information technology departments in industries.

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