BUSINESS MERGER AND ACQUISITION AS GROWTH AND SURVIVAL STRATEGIES IN A DEPRESSED ECONOMY – AN IN-DEPTH STUDY OF SOME SELECTED NIGERIAN COMPANIES.
BUSINESS MERGER AND ACQUISITION AS GROWTH AND SURVIVAL STRATEGIES IN A DEPRESSED ECONOMY – AN IN-DEPTH STUDY OF SOME SELECTED NIGERIAN COMPANIES.
ABSTRACT
The Nigerian business climate has been adjudged by expects as one of the hostile, turbulent and volatile and vet challenging. It stands to reason, therefore, that for tangible success or survival (as the case may be ) to be recorded, the active player must know his onion, be acquainted with the trains of the Nigerian economy and be able to interpret accurately the handwriting of the inter playing forces in the economy, some of which have taken renown financial analysts to their wits’ end. The volatility and vulnerability of the national economy, coupled with frequent changes in government policies and legislation have under accurate forecast as a vital management tool an economic mizage.
Unfortunate though as the situation may seem, it offers the “wise group” bott corporate and individuals to prove its’ mettle when the chips are down.
The concept of meager and acquisition, which is the theme of the study is contemporary and throw up of many unfolding challenges of Nigerian’ depressed economy – as the wise group of business companies, scheme not only to stay afloat but also to flourish.
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY 1
SELECTED COMPANIES 6
CHAPTER TWO
2.1 ACQUISITION IN NIGERIA 11
MEZGEZS/ACQUISITION 18
CHAPTER THREE
3.1 INTRODUCTION 23
CHAPTER FOUR
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION & RECOMMENDATION
BIBLIOGRAPHY 44
CHAPTER ONE
INTRODUCTION
Growth is necessary to determine the performance and continued existence of any business organization. Without growth, a business can hardly attract good management to itself.
The use of meager and acquisition as a growth and survival strategy in a depressed economy like ours appears to be on the increase in recent times. This is not suprising, considering the large number of business failures and folrups as a result of advise micro and macro economic climate.
In the face of such hostile business climate, however, some business organization that belong to the “wise group” started thinking of how to pull their resources together by the way of meager and acquisition as a survival cum growth strategy.
Business meager and acquisition has played an important role in the growth and survival of many firms in Europe, U.S.A and Nigeria. But before venturing into such a gargantuan adventure, financial mangers should view its as organization or employers.
1.2 STATEMENT OF PROBLEM
In the light of the confusion and tumults of the modern business environment globally, some firms have folded up while others only managed to keep afloat. It is but interesting to observe that in the midst of such unfavourable business environment, some enterprises do not merely survive but post super profits. The logical question is what factors could account for the divergent fortunes of some firms of identical size and status in the same industry and operating in the same economy?
While not pretending to have all the answers, I make bold to state, that Business meager and acquisition has become of the fashionable surviving strategies for many companies.
It is therefore, the intention of this study to investigate the effect of meager and acquisition on the performance of some selected companies in Nigeria.
Furthermore, the study will also seek to establish any possible relationship as otherwise between profitability of a company or increase in its earnings per share and its meager or acquisition scheme.
At this juncture, it may be pertinent to acknowledge the view of some expects that many business fusion and acquisition had often resulted in disappointment, as the profit level of the business organization took a nose dive. Should this be, the organization wishing to diversify or expand its operation would be compelled to seek out any ailing firm with suitable production plant and technology as well as good distribution network.
For the purpose of the study, three (3) public limited liability companies have been selected, namely;
1.3 OBJECTIVE OF THE STUDY
The study is a deliberate effort to enquire into the effect of business merger and acquisition strategic on the performance of the above selected Nigerian firms. The purpose of the studies also includes:
1.4 SIGNIFICANCE OF THE STUDY
With the recent increase in the incidence of liquidation and bankruptcy of companies together with dwindling economic situation of the country, there is need for the examination of the effect of business merger and acquisition in the performance of Nigerian business organization. It is however believed that with the study of the companies that are involved in the of the strategy as a means of survival, one would be able to assess the profitability of the strategy being widely adopted in the Nigerian business environment as a survival cum growth strategy. It is in the light of the foregoing that the subject of this study in considered very significant.
1.5 scope and limitations of the study
it is very important to acknowledge the fact that the study is restricted to the three (3) companies earlier mentioned. Hence the researcher will base his conclusion(s) on the findings from such a few number out of many similar companies in the country.
Further to the above restriction is the problem of lack of eleventh materials such as annual reports of some of the companies under study from their corporate head quarters or from the corporate Affaires commission.
Finally, time posed yet another constraint. Time and energy and all so finance. With all these problem not withstanding, it is hoped that the study will satisfy its objectives.
1.6 CORPORATE PROFILES OF THE SELECTED NIGERIAN COMPANIES
In the financial statement/financial report of John Holt (1992: 4), John Holt was incorporated in Nigerian in 1961. Prior to the Nigerian Enterprise promotion Decree, John Holt was a foreign owned and controlled business organization following the repeal of the Decree in 1977, and the amended version, Nigerians became majority share holders with sixty percent (60%) controlling interest, while the remaining forty percent (40%) was retrained by John Holt Liverpool as stipulated in the 1977 Decree with regards to ownership of business enterprises.
In 1985, the company, decisions of expansion of its network and diversification acquired Ogbemudia farms and in 1986, they merged with John Holt investment.
The principal activity of the company includes; manufacturing of cosmetics, toiletries, boat, assembly and distribution of motorcycles, out board engines and generators. Others are poultry farming, pharmaceuticals, general merchandising, engineering shipping services, export and property investment
The unilever Nigeria Plc is a member of the company of the uni-lever group, an international company that is one of the largest produces of consumer goods in the world with more than 500 companies operating in about 70 countries. According to a study in the history and development of unilever Nigeria Plc formally known as lever brother (1988) the company was founded by William Heshet lever with his brother, James Davie Lever.
The company Unilever Nigeria Plc engages in the manufacturing and marketing of a wide range of detergents and cleaning materials for fabric washing, household cleaning, skin care products, baby care product, industrial cleaning and packaged foods ranging from beverages, seasoning and table managing to baking products for baking industries’.
According to the report and financial statement of the company (Lever Brothers Plc. 1994:4), the company was incorporated in Nigeria as a private company in 1923 under the name lever Brother limited.
In compliance with the companies and Allied Mathers Decree (CAMD) 1990 no 2, the name of the company was charge to lever brother Nigeria plc and later in 2003 to Unilever.
Lever Brother Nigeria Plc had to strengthen its hold in the food and drink industries by merging with Chesebrough products industries limited in December 1988 to become a big organization in personal product business
The company has about 33000 institutional shareholders, 3894 direct staff strength working in its facilities and various distribution points.
The company recently reduced the number of its manufacturing sites in Nigeria from 5 to 3, they are located at Lagos, Aba and Agbora.
In the early report and financial statement of the Nigerian Bottling Company Plc (1995:5), the Nigerian Bottling company was incorporated in 1951. The company later went public in 1972 and is quoted on the Nigeria security market. The stock Exchange with about 60% etits shares held by Nigerians.
The company has a whole franchise for the production and bottling in Nigeria of the Coca-Cola range of soft drinks that includes Coca-Cola, Sprite, Fanta Orange, Krest Lemon etc. with its’ production plants scattered in the Western Nigeria (Apapa, Ikeja, Ibadan, Benin City) and Eastern Nigeria (Enugu, Port-Harcourt, Owerri) and in Northern Nigeria (Kano, Jos and Kaduna).
The company has also set up soft drinks caring operation at Ikeja and Ota. It is also a major shareholder in continental can company Nigerian limited, which manufacturers cars.
1.7 DEFINITION OF TERMS
Acquisition the purchase and takeover of one company by another company.
Business Merger. This is when two or more independent companies combine or fuse to form a new company.
Strategy: An integrated plan through which a business organization accomplishes its’ set objectives.
Going Private. The process of transmuting a publicly held company into a privately held one (PLC)
Hostile takeover: An acquisition offer or takeover attempt that is opposed by the management of the target company.
Proxy Fight: A contest waged by competing management teams for the shareholders vote necessary to gain control over management of the firm.
Synergies: Increase in the value of a company’s activities which result from combining separate operations into a single operation.
Target Company: A company that another firm aims to acquire.
Tender offer: A public offer by a firm to buy the shares of another company.
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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
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form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
ABSTRACT
The Nigerian business climate has been adjudged by expects as one of the hostile, turbulent and volatile and vet challenging. It stands to reason, therefore, that for tangible success or survival (as the case may be ) to be recorded, the active player must know his onion, be acquainted with the trains of the Nigerian economy and be able to interpret accurately the handwriting of the inter playing forces in the economy, some of which have taken renown financial analysts to their wits’ end. The volatility and vulnerability of the national economy, coupled with frequent changes in government policies and legislation have under accurate forecast as a vital management tool an economic mizage.
Unfortunate though as the situation may seem, it offers the “wise group” bott corporate and individuals to prove its’ mettle when the chips are down.
The concept of meager and acquisition, which is the theme of the study is contemporary and throw up of many unfolding challenges of Nigerian’ depressed economy – as the wise group of business companies, scheme not only to stay afloat but also to flourish.
CHAPTER ONE
- INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
- STATEMENT OF PROBLEM 2
- OBJECTIVE OF THE STUDY 4
- SIGNIFICANCE OF THE STUDY 4
- SCOPE AND LIMITATIONS OF THE STUDY 5
- CORPORATE PROFILES OF THE
SELECTED COMPANIES 6
- DEFINITION OF TERMS 9
CHAPTER TWO
- LITERATURE REVIEW 11
2.1 ACQUISITION IN NIGERIA 11
- TYPES OF MEAGER/ACQUISITION 15
- SUCCESSES AND FAILURES OF
MEZGEZS/ACQUISITION 18
- REASONS FOR FAILURES 19
CHAPTER THREE
- RESEARCH METHODOLOGY 23
3.1 INTRODUCTION 23
- SOURCES AND METHOD OF DATA COLLECTION 25
- PRIMARY DATA 25
- SECONDARY DATA 25
CHAPTER FOUR
- DATA PRESENTATION AND ANALYSIS 27
- GENERAL CHARACTERISTICS OF INTERVIEWEES28
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION & RECOMMENDATION
- SUMMARY OF FINDINGS 41
- CONCLUSION 42
- RECOMMENDATIONS 43
BIBLIOGRAPHY 44
CHAPTER ONE
INTRODUCTION
- BACKGROUND TO THE STUDY
Growth is necessary to determine the performance and continued existence of any business organization. Without growth, a business can hardly attract good management to itself.
The use of meager and acquisition as a growth and survival strategy in a depressed economy like ours appears to be on the increase in recent times. This is not suprising, considering the large number of business failures and folrups as a result of advise micro and macro economic climate.
In the face of such hostile business climate, however, some business organization that belong to the “wise group” started thinking of how to pull their resources together by the way of meager and acquisition as a survival cum growth strategy.
Business meager and acquisition has played an important role in the growth and survival of many firms in Europe, U.S.A and Nigeria. But before venturing into such a gargantuan adventure, financial mangers should view its as organization or employers.
1.2 STATEMENT OF PROBLEM
In the light of the confusion and tumults of the modern business environment globally, some firms have folded up while others only managed to keep afloat. It is but interesting to observe that in the midst of such unfavourable business environment, some enterprises do not merely survive but post super profits. The logical question is what factors could account for the divergent fortunes of some firms of identical size and status in the same industry and operating in the same economy?
While not pretending to have all the answers, I make bold to state, that Business meager and acquisition has become of the fashionable surviving strategies for many companies.
It is therefore, the intention of this study to investigate the effect of meager and acquisition on the performance of some selected companies in Nigeria.
Furthermore, the study will also seek to establish any possible relationship as otherwise between profitability of a company or increase in its earnings per share and its meager or acquisition scheme.
At this juncture, it may be pertinent to acknowledge the view of some expects that many business fusion and acquisition had often resulted in disappointment, as the profit level of the business organization took a nose dive. Should this be, the organization wishing to diversify or expand its operation would be compelled to seek out any ailing firm with suitable production plant and technology as well as good distribution network.
For the purpose of the study, three (3) public limited liability companies have been selected, namely;
- John Holt PLC
- Unilever Nigeria Plc
- Nigerian Bottling Company Plc
1.3 OBJECTIVE OF THE STUDY
The study is a deliberate effort to enquire into the effect of business merger and acquisition strategic on the performance of the above selected Nigerian firms. The purpose of the studies also includes:
- To find out whether the profitability of the companies are dependent on or independent on merger and acquisition.
- To ascertain whether the general staff welfare and moral of the employees of the companies have improved since the adoption of merger and acquisition
- To find out whether the earnings per share of the companies have improved since the adoption of merger and acquisition.
- To ascertain whether the increment of the companies market share are due to the adoption of merger and acquisition.
1.4 SIGNIFICANCE OF THE STUDY
With the recent increase in the incidence of liquidation and bankruptcy of companies together with dwindling economic situation of the country, there is need for the examination of the effect of business merger and acquisition in the performance of Nigerian business organization. It is however believed that with the study of the companies that are involved in the of the strategy as a means of survival, one would be able to assess the profitability of the strategy being widely adopted in the Nigerian business environment as a survival cum growth strategy. It is in the light of the foregoing that the subject of this study in considered very significant.
1.5 scope and limitations of the study
it is very important to acknowledge the fact that the study is restricted to the three (3) companies earlier mentioned. Hence the researcher will base his conclusion(s) on the findings from such a few number out of many similar companies in the country.
Further to the above restriction is the problem of lack of eleventh materials such as annual reports of some of the companies under study from their corporate head quarters or from the corporate Affaires commission.
Finally, time posed yet another constraint. Time and energy and all so finance. With all these problem not withstanding, it is hoped that the study will satisfy its objectives.
1.6 CORPORATE PROFILES OF THE SELECTED NIGERIAN COMPANIES
- JOHN HOLT PLC
In the financial statement/financial report of John Holt (1992: 4), John Holt was incorporated in Nigerian in 1961. Prior to the Nigerian Enterprise promotion Decree, John Holt was a foreign owned and controlled business organization following the repeal of the Decree in 1977, and the amended version, Nigerians became majority share holders with sixty percent (60%) controlling interest, while the remaining forty percent (40%) was retrained by John Holt Liverpool as stipulated in the 1977 Decree with regards to ownership of business enterprises.
In 1985, the company, decisions of expansion of its network and diversification acquired Ogbemudia farms and in 1986, they merged with John Holt investment.
The principal activity of the company includes; manufacturing of cosmetics, toiletries, boat, assembly and distribution of motorcycles, out board engines and generators. Others are poultry farming, pharmaceuticals, general merchandising, engineering shipping services, export and property investment
- UNILEVER NIGERIA PLC
The unilever Nigeria Plc is a member of the company of the uni-lever group, an international company that is one of the largest produces of consumer goods in the world with more than 500 companies operating in about 70 countries. According to a study in the history and development of unilever Nigeria Plc formally known as lever brother (1988) the company was founded by William Heshet lever with his brother, James Davie Lever.
The company Unilever Nigeria Plc engages in the manufacturing and marketing of a wide range of detergents and cleaning materials for fabric washing, household cleaning, skin care products, baby care product, industrial cleaning and packaged foods ranging from beverages, seasoning and table managing to baking products for baking industries’.
According to the report and financial statement of the company (Lever Brothers Plc. 1994:4), the company was incorporated in Nigeria as a private company in 1923 under the name lever Brother limited.
In compliance with the companies and Allied Mathers Decree (CAMD) 1990 no 2, the name of the company was charge to lever brother Nigeria plc and later in 2003 to Unilever.
Lever Brother Nigeria Plc had to strengthen its hold in the food and drink industries by merging with Chesebrough products industries limited in December 1988 to become a big organization in personal product business
The company has about 33000 institutional shareholders, 3894 direct staff strength working in its facilities and various distribution points.
The company recently reduced the number of its manufacturing sites in Nigeria from 5 to 3, they are located at Lagos, Aba and Agbora.
- NIGERIA BOTTLING COMPANY PLC
In the early report and financial statement of the Nigerian Bottling Company Plc (1995:5), the Nigerian Bottling company was incorporated in 1951. The company later went public in 1972 and is quoted on the Nigeria security market. The stock Exchange with about 60% etits shares held by Nigerians.
The company has a whole franchise for the production and bottling in Nigeria of the Coca-Cola range of soft drinks that includes Coca-Cola, Sprite, Fanta Orange, Krest Lemon etc. with its’ production plants scattered in the Western Nigeria (Apapa, Ikeja, Ibadan, Benin City) and Eastern Nigeria (Enugu, Port-Harcourt, Owerri) and in Northern Nigeria (Kano, Jos and Kaduna).
The company has also set up soft drinks caring operation at Ikeja and Ota. It is also a major shareholder in continental can company Nigerian limited, which manufacturers cars.
1.7 DEFINITION OF TERMS
Acquisition the purchase and takeover of one company by another company.
Business Merger. This is when two or more independent companies combine or fuse to form a new company.
Strategy: An integrated plan through which a business organization accomplishes its’ set objectives.
Going Private. The process of transmuting a publicly held company into a privately held one (PLC)
Hostile takeover: An acquisition offer or takeover attempt that is opposed by the management of the target company.
Proxy Fight: A contest waged by competing management teams for the shareholders vote necessary to gain control over management of the firm.
Synergies: Increase in the value of a company’s activities which result from combining separate operations into a single operation.
Target Company: A company that another firm aims to acquire.
Tender offer: A public offer by a firm to buy the shares of another company.
Download our android mobile app for more materials
ORDER NOW
COMPLETE MATERIAL COST N2,500 Or $10. FRESH PROJECT MATERIAL COST 50,000 NAIRA FOR UNDERGRADUATE, OTHERS 100,000 -200,000 NAIRA.
THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
MAKE YOUR PAYMENT INTO ANY OF THE FOLLOWING BANKS:
GTBANK
Account Name : Host Link Global Services Ltd
ACCOUNT NUMBER: 0138924237
Account Name : Host Link Global Services Ltd
ACCOUNT NUMBER: 0138924237
First Bank:
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Account Name: Chi E-Concept Int’l
Account Name: 3059320631
Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
Account Number: 0117780667.
Swift Code: GTBINGLA
Dollar conversion rate for Naira is 175 per dollar.
ATM CARD: YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANK SECURITY FOR GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY.
OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.
form>DELIVERY PERIOD FOR BANK PAYMENT IS LESS THAN 24 HOURS
CALL OUR CUSTOMERS CARE OKEKE CHIDI C ON : 08074466939,08063386834.
AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO
08074466939 or 08063386834, YOUR PROJECT TITLE YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.
WE HAVE SECURITY IN OUR BUSINESS.
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