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
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Finally, the following organizations deserve mention and gratitude:
Strategic African Securities (SAS), Merban Registrars (a division of Merchant
Bank Limited), Ghana Stock Exchange (GSE) and Guinness Ghana Breweries
Limited. Special mention must be made of Mrs. Harriet Antwi, head of Merban
Registrars; Miss Angela, head of SAS Research Department and Mrs Woode , head of GSE Research Department.

v i

TABLE OF CONTENTS
Content

Page

DECLARATION

ii

ABSTRACT

iii

ACKNOWLEDGEMENTS

iv

DEDICATION

v

TABLE OF CONTENTS

vii

LIST OF TABLES

vi

LIST OF FIGURES

vi

CHAPTER ONE: INTRODUCTION

1

Background

1

Problem Statement

5

Objectives of Study

6

Significance of Study

6

Structure of the Study

8

CHAPTER TWO: LITERATURE REVIEW

9

Introduction

9

Definitions

9

Classifications of Mergers

11

Reasons For Mergers (Mergers Versus Internal Growth)

13

Non Value Maximization Motivation Theory

14

Value Maximization Motivation Theory

17

vii

Justification of Mergers

24

Who Gains From Mergers?

25

The Procedures Of Mergers

30

Determination of the Value of a Firm

33

Terms of Mergers

35

Quantitative Factors Affecting Merger Terms

35

Merger Waves

37

CHAPTER THREE: METHODOLOGY

41

Introduction

41

Background of the Companies

41

Study Design
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