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Effect of Synergy on Financial Performance of Merged Financial Institutions in Kenya

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dc.contributor.author Ogada, Agnes
dc.contributor.author Njuguna, Amos G.
dc.contributor.author Achoki, George
dc.date.accessioned 2016-12-08T12:40:06Z
dc.date.available 2016-12-08T12:40:06Z
dc.date.issued 2016
dc.identifier.issn 1916-971X E-ISSN 1916-9728
dc.identifier.uri
dc.identifier.uri http://erepo.usiu.ac.ke/11732/3051
dc.description A Journal article by Dr. Amos Njuguna, the Associate Dean, Chandaria School of business at USIU-Africa en_US
dc.description.abstract Mergers and Acquisitions deals that create value constitute at least one or a combination of financial and operational synergy. This paper investigates the effect of synergy on financial performance of merged institutions in the financial services sector in Kenya. The paper adopted a mixed research design, pre and post-merger secondary data was collected from 40 (forty) institutions in the Kenyan financial services industry that had concluded their merger processes by 31 December 2013.Financial synergy wasproxied using the liquidity ratio while operating synergy was measured using growth in sales. Primary data was used to explain the results of the secondary data.Panel data analysis was used to determine the change in the study variables and trends over time between 2009 and 2013, event window (pre-merger and post-merger) analysis was used to test for any significant difference in performance means before and after merger as a result synergy, while regression analysis was used to determine the relationshipbetween synergy and profitability.Resultsshow that there is a positive relationship between performance, operating synergy and financial synergy, and that there was significant improvement in performance post-merger. From these findings, the study recommends that institutions should critically evaluate the overall business and operational compatibility of the merging institutions and focus on capturing long-term financial synergies as this has a positive effect on the performance. en_US
dc.publisher Canadian Center of Science and Education en_US
dc.relation.ispartofseries ;Vol. 8, No. 9; 2016
dc.subject Mergers and Acquisitions en_US
dc.subject Financial services sector en_US
dc.subject ROA en_US
dc.subject ROE en_US
dc.subject Operating synergy en_US
dc.subject Financial synergy en_US
dc.title Effect of Synergy on Financial Performance of Merged Financial Institutions in Kenya en_US
dc.type Article en_US


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