M.Com. (Financial Management) / Mergers and acquisitions (M&A) is a thoroughly researched area in finance. However, some basic concerns still remain unresolved such as the measurements of corporate performance post M&A (Agrawal, Jaffe & Mandelker, 1992:1605. In this study, the impact of M&A on corporate performance of South African listed companies in the financial sector was investigated. The primary goal was to determine if corporate performance post M&A does actually change. Share price studies have had little success in relating the gains in equity value of M&A to improvements in subsequent corporate performance (Healy, Palepu & Ruback, 1992:136). Therefore, an accounting study approach was applied to determine if corporate performance changes post M&A. The accounting study utilised a quantitative approach that follows a quasi-experimental research design. This involved statistical testing to examine the accounting data of companies before (pre-testing) and after (post-testing) the M&A, to determine a change in corporate performance. Accounting ratios were applied as performance indicators and consisted of: inflation adjusted return on assets, inflation adjusted return on equity, operating profit margin and return on capital employed. None of the performance indicators indicated a statistical significant change between pre and post M&A performance. It was concluded that the sample of financial companies that engaged in M&A did not experience a significant change in corporate performance within their first financial year post M&A.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:11439 |
| Date | 10 June 2014 |
| Creators | Musvasva, Josia |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Johannesburg |
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