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ABSTRACT
The study examines the effectiveness of Merger and Acquisition (M&A) in the Nigerian cement industry with a case-study of the synergy between Beune Cement Company (target) and Dangote Cement Plc (acquirer) in the last quarter of 2010. Secondary data were sourced from the financial reports of the designated companies spanning 2005 to 2013. Three years pre and post-merger sample data were considered and the student‘t’ test for paired sample statistical technique employed for the analyses. Findings reveal a significant difference among firms and that the new entity resulting from M&A is better-off than the pre-merger firms in overall performance, production capacity and labour employment. However, results also show no significant difference in the management efficiencies of both pre and post-synergy firms. A mixed result was found for shareholders’ benefits. While a significant difference exists in shareholder’ gains in favour of the target firm as a result of M&A in the new firm, shareholders of the acquiring firm were not significantly better-off after the synergy. The study recommends that government, industrial regulatory bodies and relevant stakeholders should embrace M&A as a viable tool to re-structuring and consolidating operation and production activities of firms is an industry.
