The Effect Of Merger And Acquisition On An Organisational Performance
Abstract
This exploration work named “ The effect of Merger and Acquisition on an organizational performance shows the achievement of companies coming together.
For junction and accession to be worth as described, there should be mutualism, the admixture between two separate companies to form a single company is known as junction also accession is the purchase of a controlling interest on company by another company.
A junction can be between two companies with quoted share in stock exchange. It can also be between companies falling under the same schedule.
The analysis aspect of this design addresses about the data and interpretation and the two essential aspect of exploration design It also the imperative interpretation of result. The recommendation of the design illogically treat the companies encamp in Nigeria that fall under oil painting companies in Nigeria. It also raised to insure a good relationship between two companies.
The ideal of the study will give an sapience and measure the degree at which association with another association profitably, increase in request share, cost saving( effectiveness) product diversification.
Chapter One
Preface
Background To The Study
In all mortal conditioning, there are generally successes and failures. Businesses are thus no exception. In ages of smash as we endured in the medial seventies during the oil painting smash, numerous business enterprises and individualities strived in an period of cornucopia and squander mania. In such an period, employment, product and income are at there peak situations and. government expenditure rise vastly. During this period also, no bone complains and businessmen don’t suppose of means of survival and food.
On the other hand, when the bay days are over and down- turns take over the dooms tones arrive and business failure becomes the other of the day as a result of adversemacro-economic condition. Accordingly, expansion is hindered for indeed surviving enterprises. This is the time when company directors, government and individual flash back to suppose of “ Combinations AND Accessions ” as viability, belt tightening and survival.
To avoid increase in liquidation and ruin of companies, to stem the drift of adding severance that might affect from check of companies. “ junction and ACQUISITION is a precious route to pool together the strength and solidarity in analogous associations to induce adding business conditioning to sustain the future of our companies. “ junction AND ACQUISITION ” MW from serious fiscal torture and give similar business with new operation and better access to new fiscal coffers that will save association from negative effect of performance.
Every business association expects to make profit eventually. Profitability defense and rational for remaining in business of course investors, that is, the proprietor don’t only see the profit position as a profitable,etc.
The issue of Merger and Acquisiton in present day business operation has been a dream realized, Merger and Acquisition have played an immense part in the external growth and internal growth of leading companies worldwide.
In United State of America, junction started between 1890 to 1904 and as continue through to the present day. Presently, about two third( 2 3) of the large public pot in the United States have intermingled in their history.
Merger And Acquisition must be seen as available means of saving, companies from serious fiscal torture and give similar business with new operation and better access coffers that will save an frugality.
Literally background Of Chevron Texaco Nigeria
Texaco is a US grounded transnational oil painting and gas company, which as integrated operations encompassing upstream and downstream oil painting, chemicals andco-generation. The company began in Texas in early part of the century and has since grown to come one of the leading transnational oil painting companies. Texaco, along with Chevron, owns 50 of caltex, which has expansive conditioning in the far East and Africa.
Texaco, through upstream and downstream conditioning play a part in the Africa oil painting assiduity. Texaco has a strong oil painting and natural gas product base in the
United States with an transnational spread. of producing means ill the North Sea, south and Central America, Far East Australia and Africa. Texaco African product conditioning are concentrated in Angola and Nigeria, which together yield further than 20mbd of crude oil painting. Arigola has been the focus of’ disquisition conditioning through colorful systems at Rala, Tamboril and Sulele south. Texaco has maintained its oil painting product situations in Nigeria and Angola during 1995. The company holds and operates a 20 working interest in a institute that maintained Texaco’s share off- reinforcement crude oil painting product at 9000 barrels a day, despite a 1994 strike by oil painting workers against the Nigerian government. It also lately acquired from Statoll and BP a300/0 equity interest ill high underwater blocks near its current Nigerian operations. Despite the civil war in Angola, which temporarily shut- in of two fields in the southern portion of an out- store block, Texaco( 200) increase it share of product increased slightly to 7000barrels a day at the southern end of the block. Following the signing of ceasefire agreement late in 1994, Texaco has been moving a head with plans to expand product off reinforcement Angola and proceeded product from restored on- reinforcement installations. Refining is an important exertion for Texaco, which have seven refineries ill the US, colorful refinery means in Sought and Central America as refineries in Netherlands, UK and refining in the chow East. Texaco’s marketing conditioning include an expansive retail network in the United States as well as strong positions In Europe, South and Central America and West Africa. I n the Asia pacific region and in South Africa the company has an expansive marketing presence through caltex.
West Africa, Texaco requests further than 20mbd through networks In Nigeria, Ivory Coast, Cameroon and Togo. In October 2000 chevron and Texaco agreed to combine their operations to come Chevron Texaco.
previous to when Chevron and Texaco combine, Texaco Nigeria plc is a company that was established in 1969 in Nigeria and is involved in oil painting disquisition and distribution and it’s also listed in Nigeria stock exchange and Texaco objectification was Incorporated in 1926 as Texas pot. It’s headquartered in White Plains, New York. It has its Nigeria office located at 8 McCarthy Street Lagos. It’s also of the world’s largest intertwined oil painting companies operating iii further than 150 countries worldwide.
In over forty times of operating in Nigeria Chevron Nigeria limited( CNL) has established its tone as a leader in oil painting and gas disquisition and product In 1963, the company discovers Nigerians Successful off- reinforcement examiner- located in the Western Niger- delta. It again blast the trail in gas application when in 1997 it commissions the Escravos Gas cover- Nigeria’s first major gas application scheme. Chevron Nigeria limited is the driver of the NNPC/ Chevron common adventure in which The NNPC holds 60 with Chevron retaining the balance of 40. Chevron Corporation headquartered in Sa- n Francisco California. Its Nigerian office is located at Chevron drive Lekki- Peninsula Lagos. It’s operating a nearly a 100 countries worldwide
Statement Of The Problems
The abdications of junction and accession in diving the organizational problems have come a debatable issue in ultramodern time. numerous association aren’t willing to borrow Merger and Acquisition as a result to the abating organizational performance due to some the following reasons;
original hostility and bad blood due to the modalities of junction
Position of new commercial culture
incapability to accept changes by the being work force and staff union
Fraudulent representation and lack of deliberate acculturative and staff exposure
These among numerous problems are what this exploration intends to examine.
Objects Of The Study
The ideal of the study will give an sapience and measure the degree at which associations has achieved the crucial explanation of it junction with another association profitably, increase in request share, cost saving( effectiveness) product diversification.
To bandy in details the preamble, process and format that Merger and Acquisition takes, and to explain colorful delineations of Merger And Acquisition, its forms and when they take place.
To bandy in details primary statement, processes and format that Merger and Acquisition takes and also to know how, if they’re suitable to prompt organizational performance and if their effect is salutary.
To bandy why Merger and Acquisition do not work, problems and why Merger and Acquisition is embarked upon despite all problems essential and it prerequisites.
Significance Of The Study
As a result of profitable recession in Nigeria that led to the check of numerous companies makes it important for the benefit of Merger and Acquisition to be examined from a public perspective rather from individual forms.
likewise, in view of the fact that utmost of the enterprises with deduced finance and operation attributes need for Merger And. Acquisition are foreign possessed. Care has to taken so that the games of the indigenization exercise aren’t lost.
It can be recalled that the deregulation of the frugality by the present government has been making product conditioning veritably delicate for the oil painting sector in terns of the price input both foreign and domestic, hence negatively affected the prices of the incorporating companies.
Eventually, in the light this, it has come imperative to find out the extent of the effect which Merger and Acquisition has on the performance of Chevron and Texaco. And the profitable viability of Merger and Acquisition as growth or survival options for business concern in Nigeria.
Compass And Limitation Of The Study
The compass of the study will look at the composition and structure of Merger and Acquisition with particular reference to Chevron Texaco Company in Nigeria, it’ll be limited to a many times back and this is done so as to guide against over flogging of the subject concern.
As for the limitation of the study, the problem of fiscal constraint on the part of the experimenter limits the disaffection of accoutrements . There’s also the uncooperative station of some of the library attendants and lack of acceptable and applicable textbooks. Also importunity and uncooperative nature of the workers of the companies use as case study. Despite these constraints, the study will stand the test of time in its constraints and determined discussion with the applicable textbooks, journals, magazinesetc.
LITERATURE REVIEW
They’re the ideas and opinion of some authors and experts on the subject matter under consideration. It also intends to review the effect of Merger and Acquisition on an organizational performance. It intends to review and estimate performance of the two companies before and after Merge. likewise it also intends to review colorful forms of Admixture of companies, and also to review some of the reasons why Merger and Acquisition do not work or simply wobble along.
Exploration Methodology
In this study, we shall employ both quantitative ways and descriptive system of analysis. The use of correlation analysis will be employed. The secondary data will be collected from the periodic report and statement of accounts of the merged companies. Other source of data includes journals, journals, handbooks and magazinesetc.
Primary and secondary system of data collection is to be employed in this exploration. The interview system of gathering data will be considerably employed for the purpose of this exploration work. This is because the Merger and Acquisition between the two companies had formerly taken place. The secondary information will be uprooted from publications, journals and documents etc, which will help in the completion of this exploration work.
The correlationco-efficient analysis is the logical fashion to be employed in testing the thesis. This fashion help in measuring the strength of a direct relation between two or further variables that is, the unit change in a variable associated with the change in another variable.
SOURCES OF DATA
The data to be used for this exploration work comes from two sources
PRIMARY SOURCES OF DATA The primary source of data consists of interview and questionnaire.
SECONDARY SOURCES OF DATA The secondary sources of data on the other hand will correspond of publications, journals, periodic reports, textbook books, news papers and information from websites.
Exploration Questions
1. Does Merger and accession have positive impact on an organizational performance?
2 Does Merger and Acquisition have negative impact on an organizational performance?
3 Is it necessary for an association to combine?
4 How important is junction and Acquisition
5 Is Merger and Acquisition the stylish result to organizational failures?
6 Why does Merger and Acquisition do not work in. some associations?
Exploration Suppositions
This is the aspect that deals with testing of the thesis, chamber’s wordbook define a thesis testing as a conditional supposition for evaluation, base of discussion for measuring of academic performance thesis testing could also be likened to a premise ready for an examination, the correlation analysis will be used for thesis in this exploration study. The form of operation will be completely bandied in the fourth chapter. The exploration question asked is
1. Merger and Acquisition doesn’t have any impact or changes in an organizational performance = H0.
2. The impact of Merger and Acquisition will have a positive effect in an organizational performance = HA
Data Analysis And Ways
The following quantitative and qualitative system of data analysis shall be employed in this exploration work; Correlation analysis, Chi Square( X2), Jury of expert opinion system.
Plan Of The Study
The complete plan of the study is organize as follows
Chapter One embodies the preface, literal background of Chevron Texaco Nigeria, objects, of the study, exploration methodology, Hypothesis Testing, Scope and Limitations of the study, description of terms.
Chapter two contains the literature review, under which the experimenter will review propositions and former studies( colorful views) on the impact of Merger and Acquisition on an organizational profitable development, types of junction. Why Merger and Acquisition do not work or simply wobble along. Considering internal perspective to mention but many.
Chapter three will feeds the domination theoretical position of the impact of Merger and Acquisition.
Chapter four is substantially on the donation and analysis of data collected.
Chapter five provides the summary, conclusion and recommendation of the study.
Description Of Terms
junction junction is the combination of two or further companies in which only one establishment survives as a legal reality.
immersion An immersion is a combination of two or further companies into an being companies. All companies except one loose their identity in a junction through immersion.
connection A connection is a combination of two or further companies into a new company. In this form of junction, all companies are fairly dissolved and a new reality is created.
ACQUISITION An accession may be defined as an act of acquiring effective control by one company over asset and. operation of another company without any combination of companies. therefore, in an accession two or further companies may remain independent, separate legal reality, but there may be change in control of companies.
preemption A preemption may also be defined as carrying of control over operation of the company by another. An accession or take over doesn’t inescapably number full legal control. A company can have effective control over another company by holding nonage power.
HOLDING COMPANY A company can gain the statue of a holding company by acquiring shares of other companies. A holding company is a company that holds further than half of the nominal value of the equity capital of another company called a attachment company, or controls the composition of its Board of Directors.
Community husbandry realized in a Merger where the performance of the confined establishment exceeds that of its preliminarily separated corridor.
husbandry OF SCALE The benefit of size in which the average unit cost falls as volume increases.
TENDER OFFER An offer to buy current shareholders stock at a specified price, frequently with the ideal of gaining control of the company. The offer is frequently made by another company and generally for further than the present request price.
WHITE KNIGHT A Friendly acquirer, at the assignation of target company, purchase shares from the hostile endeavor( s) or launches a friendly counter shot in other to frustrate the original unfriendly endeavor( s).
STRATEGIC ALLIANCE An agreement between two or further independent enterprises to cooperate in other to achieve some specific marketable ideal.
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