Mergers and Acquisitions in Ghana

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UNIVERSITY OF CAPE COAST

THE IMPACT OF MERGERS AND ACQUISITIONS ON THE
CORPORATE FINANCIAL PERFORMANCE OF GUINNESS GHANA
BREWERIES LIMITED

BY
STEPHEN SANYE BATOGBEE SEIDU

A DISSERTATION SUBMITTED TO THE DEPARTMENT OF
ACCOUNTING AND FINANCE OF THE SCHOOL OF BUSINESS OF
THE UNIVERSITY OF CAPE COAST IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE AWARD OF MASTER OF BUSINESS
ADMINISTRATION

AUGUST 2008
 

UNIVERSITY OF CAPE COAST

THE IMPACT OF MERGERS AND ACQUISITIONS ON THE
CORPORATE FINANCIAL PERFORMANCE OF GUINNESS GHANA
BREWERIES LIMITED

STEPHEN SANYE BATOGBEE SEIDU

AUGUST 2009
 
 

DECLARATION

Candidate’s declaration
I hereby declare that this dissertation is the result of my own original research and that no part of it has been submitted for another degree in this university or elsewhere.

Candidate’s signature………………………

Date ……………………………

Name:

 
Supervisor’s declaration 
I hereby declare that the preparation and presentation of this dissertation were  supervised in accordance with the guidelines on supervision of dissertations laid down  by University of Cape Coast. 

 
Supervisor’s signature ……………………………………     Date …………………………………………………..   
Name………………………………………………………………………………………………… 

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ABSTRACT
Mergers and acquisitions are a relatively new but fast growing phenomenon in the Ghanaian economy as a response to increasing competition, emanating from the changing business environment. However, because they are relatively new in the country, mergers and acquisitions are not well understood in Ghana.

This study examines the impact of mergers and acquisitions on the acquiring company’s corporate financial performance, within the Ghanaian economy, using Guinness Ghana Breweries Limited as case study. The issue was investigated using performance measure based on the company’s annual reports. The results of the study show that the accounting performance declined after the merger. There has being a downward fall in profitability performance. Sales growth declined sharply during the post-merger periods, although in absolute terms there were increases. Operating expense has being increasing while liquidity and financial leverage have both being on the decline. However, earnings per share and dividends per share were in continuous increase from the pre-merger period to the second post-merger year, due to the increases in absolute post-merger sales. But in the third post-merger year both of these indicators started to decline sharply.

To be able to attain the merger objectives of achieving synergy, reducing cost of operations and improving market performance and profitability of the joint iii 
 

operations and other performance benefits, the company should strengthen its business processes, restructure its capital base and improve its cash operation cycle.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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DEDICATION

To my parents, Mama Afua Daalon Seidu and the late Seidu Lienyuri Donyaga,, and also to my late aunt, the late Pogsaa Seidu


 

ACKNOWLEDGEMENTS
I wish to express my profound appreciation and gratitude to Mr. Augustine Addo of the School of Business, University of Cape Coast (U.C.C.), my supervisor whose patience, pieces of advice, constructive criticism and discussions enabled me to produce this work.

I also wish to express sincere thanks to all the other lecturers of the MBA course at the School of Business of U.C.C., most especially Mr. Stephen Asante, head of Accounting and Finance Department of the school for his counseling and encouragement throughout the period of my study at U.C.C.

My special thanks go to my wife, Agnes, and my children: Emmanuel, Immaculate, Janet, Samuel and Faustina for their patience, tolerance and prayers during my period of pursue of higher academic laurels at U.C.C. I am forever indebted to my parents, mama Afua Daalon Seidu and the late Seidu Lienyuri Donyaga as well as to my late aunt, the late...
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