Effect of Mergers and Acquisitions on the Determinants of Dividend Payout in Nigeria

Abstract

The effect of merger and acquisition on the determinants of dividend payout in Nigeria banks is examined in this paper. Dividend paid between 2007 and 2013 was considered in quoted banks and analysed using panel data regression technique. Determinants considered include: liquidity, growth, leverage, profitability (ROA & ROE), firm size and previous year dividend. Results showed a positive relationship between dividend paid and the following variables: liquidity, return on asset (ROA), firm size and previous year dividend. However, growth, leverage and return on equity (ROE) showed a negative relationship with dividend paid. The results are the same for banks involved in merger and acquisition and those not involved. We can therefore conclude that merger and acquisition has no effect on the determinants of dividend payout in Nigeria banks. It is therefore recommended that managers and directors should not be bothered about the effect that merger or acquisition will have on their dividend policy instead the determinants examined should be taking into consideration

Keywords: Determinants, Dividend Payout, Mergers and Acquisitions