Impact of Mergers and Acquisitions on Performance of Companies in Oil and Gas Industry

Abstract

This study investigated the impact of mergers and acquisitions on performance of the companies and analyzed the post merger challenges in the Oil and Gas sector of Nigerian economy. Secondary data on two purposively selected Oil and Gas companies that merged between 1993 and 2010 were used for the analysis. Data were sourced from the Nigerian Stock Exchange fact- book, Annual Report and Accounts of the selected companies and Federal Inland Revenue Services. Results showed that for the first company, the profit after tax had significant effect (F= 62.238; p< 0.05) likewise the net assets significantly improved (F=47.540; p< 0.05), following mergers and acquisitions. The results also showed that profit after tax of the related company significantly improved after merger (F=5.100; p<0.05) along with its net assets (F=11.471; p<0.05. Hence, the mergers and acquisitions brought about significant improvement on the performance of the companies.

JEL classification numbers:G34

Keywords: Mergers, Acquisition, Profit after tax, Net assets,