Proactive merger and acquisition and firm performance

Abstract

Holistic growth is a common phenomenon that is guaranty when all others substances take the best chosen positions at the right time and place. This improves efficiency; effectiveness and profitability are among the key benefits sought from mergers and acquisitions (M&A). This study seeks for the proactive mergers and acquisition, and firm performance.

The study is descriptive research using positive accounting theory as theoretical framework. This shows how financial reports are prepared upon which investors’ decisions are based.

The study discovers that merger and acquisition have a positive relationship with firm performance if it can be properly planned, implemented and evaluated. Specifically, organization should make efforts to attract and keep key employees of the merged organizations through performance contracts or allowance; suitable conflict settlement measures should be established  as well as  conscious effort should be made to derive the expected gains of the merger. This is because benefits from mergers and acquisitions are not automatic.

Keywords: Merger and Acquisition, Due diligence, Firm performance