Effect Of Mergers And Acquisition On Returns To Shareholders Of Conglomerates In Nigeria

Abstract

This study analyzed the investment returns to shareholders of conglomerate companies that have carried out mergers and acquisitions and their performances. Panel data for the study was collected on four sample companies for the period of fifteen years. Conglomerates companies were purposively selected for this study because they are the only sector on the Nigeria stock exchange list that has carried out merger and acquisition which covered the period of study (1990-2005). Our findings show that the relationship of net total assets in relation to the turnover, profit tax and profit margin portend a positive relationship. On the other hand the relationship between net total assets in relation to profit after tax, earnings per share and return on capital employed shows otherwise. It is recommended that companies should translate the improved performance into benefit for the shareholders.

Key words: Mergers, Acquisition, Returns, Shareholders