ATTENTION:
BEFORE YOU READ THE CHAPTER ONE OF THE PROJECT TOPIC BELOW,
PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5000 ONLY. THE FULL INFORMATION ON HOW TO PAY AND GET THE
COMPLETE PROJECT IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953, 08168759420
EFFECTS OF MERGER AND
ACQUISITION ON OANDO OPTIMAL GROWTH
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
A critical analysis of the business environment in Nigeria
today shows that most of the companies in operation to survive, for instance
companies like, Kingsway stores, UTC, Chanri, FAMAD (formally known as Baba) AG
Leventis, just to mention few, that were the toast of the town in the 1980s
have either folded up or are now merely a shadow of their former states.
The rate of corporate failure in Nigeria has been very high
and could even get worse if nothing drastic and urgent is done about it.
Ewubare (2003); Simulating corporate Growth and Survival through mergers and
acquisitions, opined that the reason some of these companies could not survive
or let alone not grow could be attributed to a plethoral of reasons one of
which is unfavourable operating environment. In his words, lithe business mode
of Nigeria came under attack when the Babangida administration uncoupled the
naira from the prior fixed exchange rate regime and introduced a measure of
volatility and uncertainty in the Nigeria Economy". This he added"
Let the crashing devaluation" of the naira on a clative basis"
Furthermore, Ewubare stated that why companies in Nigeria have a low corporate
growth rate is due to the absence of vision & imagination i.e. his view
most companies in Nigeria lack the innovation ideas and creative spirit to grow
in the midst of an unfavourable environment. British petroleum and Amaco oil
during oil companies also dropped significantly, had the foresight to merge for
survived. Their mergers created the largest company in the UK in terms of share
price return in investment and market share. (New York times, 2000) This single
merger success story in the oil industry created a foot print for other oil
companies, world over to follow almost immediately. Ironically, in spite of
this and successful consolidation stories it is discouraging to know that
merger failure rate (in terms of increasing share holders value) was put at a
83% and the general failure rate put some between 40 - 80% in a 1999 survey
(Porter, and Warsh 2002) suggests that up to 65% of failed mergers and
acquisition are due to "people issue" i.e. intercultural difference
causing communication breakdowns that results in poor productivity.
Inaddition, Leis (2002) opined that sever factors contribute
to this dismal statistic. These failures are not usua.lly caused by outside
factors like the market competition, high purchase premium or excessive
beverage, rather, the failure has three primary causes disparate management
styles organization, culture difference and clashes in decision - making
processes. According to him, the biggest challenge in handling the human side
of the merger equation. People issues ultimately drive performance can censure
a majority of operating cost.
Business combination in Nigeria until recently are not a
major feature although a couple of companies compelled by their global
affiliations have been involved in merger schemes, however the consolidation
drive of the central bank of Nigeria (CBN) is increasingly, popularizing the
practice of mergers and acquisition in Nigeria both in the banking and
corporate sector. In view of this current trend, it would help prevent the high
rate of consolidation failures while helping to enhancing corporate failures.
1.2 STATEMENT OF THE
PROBLEM
The harsh and dwindling economic conditions today have
created a bleak growth prospect for most corporate organizations in Nigeria.
These harsh economic condition which include high interest rate, increasing
devaluation of the naira, restrictive credit policies, low exchange rate of the
naira for some major world currencies among other conditions have led to
companies in Nigeria operating a very high costs, unable to secure adequate
funds for their operations, increase working capital requirement among others,
This ugly trend has really hampered corporate growth in Nigeria. Hence, there
is urgent need for companies in Nigeria to craft strategies to enhance their
growth in the light of these harsh economic conditions. This research work
seeks to evaluate mergers and acquisition as a way of corporate growth can be
achieved in Nigeria.
1.3 RESEARCH
QUESTIONS
This research work will find answers to the questions below:
i. Does mergers and
acquisition lead to increase in profit - ability?
ii. Does mergers and
acquisition lead to increase in firms’ value per-ordinary share?
iii.Does mergers and acquisition lead to increase in market
shares?
1.4 OBJECTIVE OF THE
STUDY
1. To investigate how
mergers and acquisitions can bring about an increase in the firms market share
as a result of increase in turnover in the post merger performance.
2. To determine how
mergers and acquisition can enhance corporate growth in Nigeria and how
profitability can be achieved.
3. To examine how
merger and acquisition can bring about an increase in firms value per ordinary
share.
1.5 SCOPE OF THE
STUDY
The scope of the research work will be limited to the period
2000 - 2005. For the purpose of this study the merger between Agip &
Unipetrol would attract the highest emphasis. All other mergers and acquisition
will, only be generally and indirectly referred to especially under the sub -
topics.
1.6 SIGNIFICANCE OF
THE STUDY
1. Operation savings
that could rest in combination of companies with similarities in investment
plans, organizational structures and market.
2. Means of gaining
economies of scale and increasing income and profitability.
3. Means of saving
companies from ultimate collapse and liquidation.
4. The activities are
cost effective and the company has larger security.
5. The borrowing
capacity of a combined company is enhanced.
1.7 LIMITATIONS OF
THE STUDY
This research work shall examine the background, meaning,
objective and importance of mergers and acquisitions in relation to corporate
growth in Nigeria it is important to note that not many cases of mergers and
acquisitions have taken place in Nigeria recently. This explains the reasons
why only Oando Nigeria Plc is taken as a case study.
Another constraints of the research work is absent of the
manager in Kakuri branch. This has limited our sources of information to the
company's annual reports, (for pre merger and post merger) scheme and other
related works.
- Lack of
adequate information to get annual reports of balance sheet.
- Financial
problems
- Lack of
inadequate materials
- Time
constraints form the mergers.
1.8 HISTORICAL
BLACKGROUND OF CASE STUDY "OANDO NIGERIA PLC.
Unipetrol (Now Oando Pic) the company commenced business,
operations as petroleum marketing in Nigeria under the name "ESSO West
Africa incorporated a Subsidiary of EXXON comp oration of the USA. The Nigeria
government 'Bought ESSO' S interest and thus became the 100% owner of the
Company. The company was then rebranded" Unipetrol Nigeria ltd on the 1st
March, 1991, the company became a public limited company and changed its name to
Unipetrol Nigeria Plc. In the same year 60% of the company's share holding was
sold to the Nigerian pubic under the first phase Of the then privatization
exercise. In February 1992, the company was quoted on the Nigeria Stock
Exchange. Ocean oil services ltd was founded to supply and trade petroleum
products within Nigeria. Ocean oil limited was found to supply and trade
petroleum products worldwide. Unipetrol acquired 40% in the equity to Gaslink
Nigeria limited to utilize its exclusive gas sale and purchase Agreement with
Nigeria Gas Company. The later increased its skate to a controlling 51 % in
200.1. Under the second phase of the Federal Government of Nigeria
privatization programme, ocean and oil became a core investor in Unipetrol by
acquiring 30% of the company firm the Federal Government of Nigeria, the
balance 10% of the FGBNIS holding was sold to the Nigeria public. In the year
2002 the company bid for and acquired 60% in the equity of Agip Nigeria Plc
from Agip petrol international. Unipetrol Nigeria Plc merged Agip Nigeria Plc
and 'was re-branded "Oando" Oando marketing emerged as Nigeria
largest downstream energy group in 2003. Oando is trading arm was re-energized
by the incorporation of Oando trading limited (Bermuda) and Oando supply and trading
limited. This move consolidated the group is trading operations Worldwide and
in Nigeria respectively. Oando power emerged as a synergy of Oando's customer
relationship management expertise and Gaslinks exclusion gas distribution
franchise to provide reliable power to industries. In 2005, Oando energy
services company to achieve the groups AFS objectives in the upstream services
industry.
On the 25th November, 2005, Dando Plc became the first
African company to accomplish a cross border inward listing on Johannesburg
stock of exchange ((JSE). Oando Exploration and production limited bid and won
oil & Gas fields to boost upstream activities. In 2007, Gaslinks completed
laying of 100km gas distribution pipeline in Lagos state, today, Oando energy services
acquired two oil drilling rigs for approximately $100million for use in the
Niger Delta of Nigeria. (www.oandoplc. com/Nigeria/about –Oando).
HOW TO GET
THE FULL PROJECT WORK
PLEASE,
print the following instructions and information if you will like to order/buy
our complete written material(s).
HOW TO
RECEIVE PROJECT MATERIAL(S)
After
paying the appropriate amount (#5000) into our bank Account below, send the
following information to
08068231953
or 08168759420
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK
ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO
IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are
good online businesses in Nigeria.
But on
this site, we have provided “table of content and chapter one” of all our
project topics and materials in order to convince you that we have the complete
materials.
Secondly, we have provided our Bank Account on this site. Our
Bank Account contains all information about the owner of this website. For your
own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment,
because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website
WORD-TO-WORD. These materials are to assist, direct you during your
project. Study the materials carefully and use the information in them to
develop your own new copy. Copying these materials word-to-word is CHEATING/
ILLEGAL because it affects Educational standard, and we will not be held
responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy
word-to-word.
FOR MORE
INFORMATION, CALL:
08068231953
or 08168759420
AFFILIATE
LINKS:
Comments
Post a Comment