Synergistic Effect of Recent Mergers and Acquisitions in Nigerian Banking Industry

Adaramola Anthony Olugbenga, Oluwagbuyi Luke Olusola


Precisely in 2010 in Nigeria, Intercontinental Bank; Oceanic Bank; Finbank and Equitorial Trust Bank were acquired by Access Bank; Ecobank; First City Monument Bank and Sterling Bank respectively as the only option against distress. The unpalatable experience that greeted the industry after the most notable consolidation of 2005 through mergers and acquisitions has become a course for concern for researchers in this area. In the light of the above, this study is aimed at investigating into the synergistic effect of the recent mergers and further confirming the position of economic theory which cites synergy as one the many possible reasons why mergers might occur. Using Enyi model and technique, the study analysed the pre and post-merger financial statements of three (3)of the four (4) merger groups whose data were available between 2006 and 2012. Our results showed that of the three merger groups only one showed evidence of synergy in the growth of shareholders funds while none of the groups achieved synergy in the growth of total assets. Suffice to say that not all mergers and acquisitions in Nigeria result into true financial synergy

Keywords: Synergy; Acquisition; Merger; Performance;

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ISSN (Paper)2224-607X ISSN (Online)2225-0565

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