The Relevent of Accounting Information in Mergers and Acquistions Decision in Nigeria (Banks)

A

TERM PAPER

ON

THE RELEVENT OF ACCOUNTING INFORMATION IN MERGERS AND ACQUISTIONS DECISION IN NIGERIA (BANKS)

WRITTTEN BY:

OGUNRUKU OLAWUMI OLAOYE

                                                              MATRIC NO:   020901105

DEPARTMENT:   ECONOMICS

COURSE:   FINANACIAL MANAGEMENT

                      April, 2010

TABLE OF CONTENT

ABSTRACT

INTRODUCTION

LITERATURE REVIEW

PRACTICE IN NIGERIA

DISCUSSION OF FINDINGS

SUMMARY CONCLUSION AND RECOMMENDATION

REFERENCES

APPENDIX

ABSTRACT

This paper examines the relevant of accounting information in merger and acquisition decision in Nigeria. In Nigeria, mergers and acquisitions are not so common, until recently when there was reform in the financial sector, the concepts were limited to some FMCG companies. The analysis of financial statement of any business organization is useful for the evaluation of profitability position and viability of the business. Business combinations which may take forms of mergers, acquisitions, amalgamation and take-overs are important features of corporate structural changes. For the purpose of this paper consolidation of the banking industry will be examined. The empirical reports of this paper is centered around the financial statement of Diamond bank plc before and after consolidation between period 2005- 2009.

INTRODUCTION

Mergers and acquisitions represent the ultimate in change for a business and it is expected to add value to the business. No other event is more difficult, challenging, or chaotic as a merger and acquisition. It is imperative that everyone involved in the process has a clear understanding of how the process works. However, merger and acquisitions do not add value in all cases (Ajayi, 2005). There are cases where the synergies projected for merger and acquisition deals are not achieved. “People” problems and cultural issues are often cited as the top factors in failed integrations. While merger and...