Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange

George Gitonga Inoti; Samuel Owino Onyuma; Monicah Wanjiru Muiru

doi:doi:10.11648/j.jfa.20140205.12

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Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange

George Gitonga Inoti, Samuel Owino Onyuma, Monicah Wanjiru Muiru

Published in Journal of Finance and Accounting (Volume 2, Issue 5)

Received: 26 October 2014 Accepted: 13 November 2014 Published: 18 November 2014

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Abstract

This study sought to determine whether acquisitions enhance corporate financial performance. The general objective of the study was to assess the effects of acquisitions on the financial performance of the acquiring companies in Kenya. The specific objectives of the study were; to determine the effect of acquisitions on the profitability of the acquiring company and to determine the effect of acquisitions on asset utilization of the acquiring company. Purposive sampling procedure was used to select a sample of all the acquisitions involving listed acquiring companies. Three years pre and post-acquisition financial statements of the acquiring company were examined. Key financial ratios were computed and used to determine the company’s pre and post-acquisition financial performance. Paired t-test was used to determine whether there was significant difference between the means of the two periods for each ratio. From the findings it was apparent that there was no significant difference in pre and post-acquisition ratios measuring profitability and asset utilization. The study therefore concluded that corporate acquisitions do not affect the financial performance of the acquiring company.

Published in	Journal of Finance and Accounting (Volume 2, Issue 5)
DOI	10.11648/j.jfa.20140205.12
Page(s)	108-115
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Acquisitions, Financial Performance, Nairobi Securities Exchange

References

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APA Style

George Gitonga Inoti, Samuel Owino Onyuma, Monicah Wanjiru Muiru. (2014). Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. Journal of Finance and Accounting, 2(5), 108-115. https://doi.org/10.11648/j.jfa.20140205.12

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ACS Style

George Gitonga Inoti; Samuel Owino Onyuma; Monicah Wanjiru Muiru. Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. J. Finance Account. 2014, 2(5), 108-115. doi: 10.11648/j.jfa.20140205.12

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AMA Style

George Gitonga Inoti, Samuel Owino Onyuma, Monicah Wanjiru Muiru. Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. J Finance Account. 2014;2(5):108-115. doi: 10.11648/j.jfa.20140205.12

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@article{10.11648/j.jfa.20140205.12,
  author = {George Gitonga Inoti and Samuel Owino Onyuma and Monicah Wanjiru Muiru},
  title = {Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange},
  journal = {Journal of Finance and Accounting},
  volume = {2},
  number = {5},
  pages = {108-115},
  doi = {10.11648/j.jfa.20140205.12},
  url = {https://doi.org/10.11648/j.jfa.20140205.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20140205.12},
  abstract = {This study sought to determine whether acquisitions enhance corporate financial performance. The general objective of the study was to assess the effects of acquisitions on the financial performance of the acquiring companies in Kenya. The specific objectives of the study were; to determine the effect of acquisitions on the profitability of the acquiring company and to determine the effect of acquisitions on asset utilization of the acquiring company.  Purposive sampling procedure was used to select a sample of all the acquisitions involving listed acquiring companies. Three years pre and post-acquisition financial statements of the acquiring company were examined. Key financial ratios were computed and used to determine the company’s pre and post-acquisition financial performance. Paired t-test was used to determine whether there was significant difference between the means of the two periods for each ratio. From the findings it was apparent that there was no significant difference in pre and post-acquisition ratios measuring profitability and asset utilization. The study therefore concluded that corporate acquisitions do not affect the financial performance of the acquiring company.},
 year = {2014}
}

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TY  - JOUR
T1  - Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange
AU  - George Gitonga Inoti
AU  - Samuel Owino Onyuma
AU  - Monicah Wanjiru Muiru
Y1  - 2014/11/18
PY  - 2014
N1  - https://doi.org/10.11648/j.jfa.20140205.12
DO  - 10.11648/j.jfa.20140205.12
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 108
EP  - 115
PB  - Science Publishing Group
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UR  - https://doi.org/10.11648/j.jfa.20140205.12
AB  - This study sought to determine whether acquisitions enhance corporate financial performance. The general objective of the study was to assess the effects of acquisitions on the financial performance of the acquiring companies in Kenya. The specific objectives of the study were; to determine the effect of acquisitions on the profitability of the acquiring company and to determine the effect of acquisitions on asset utilization of the acquiring company.  Purposive sampling procedure was used to select a sample of all the acquisitions involving listed acquiring companies. Three years pre and post-acquisition financial statements of the acquiring company were examined. Key financial ratios were computed and used to determine the company’s pre and post-acquisition financial performance. Paired t-test was used to determine whether there was significant difference between the means of the two periods for each ratio. From the findings it was apparent that there was no significant difference in pre and post-acquisition ratios measuring profitability and asset utilization. The study therefore concluded that corporate acquisitions do not affect the financial performance of the acquiring company.
VL  - 2
IS  - 5
ER  -

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Author Information

George Gitonga Inoti

Faculty of Commerce, Department of Accounting, Finance & Management Science, Egerton University, Nakuru, Kenya
Samuel Owino Onyuma

Department of Economics & Business Studies, Laikipia University, Nyahururu, Kenya
Monicah Wanjiru Muiru

Faculty of Commerce, Department of Accounting, Finance & Management Science, Egerton University, Nakuru, Kenya

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APA Style

George Gitonga Inoti, Samuel Owino Onyuma, Monicah Wanjiru Muiru. (2014). Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. Journal of Finance and Accounting, 2(5), 108-115. https://doi.org/10.11648/j.jfa.20140205.12

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ACS Style

George Gitonga Inoti; Samuel Owino Onyuma; Monicah Wanjiru Muiru. Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. J. Finance Account. 2014, 2(5), 108-115. doi: 10.11648/j.jfa.20140205.12

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AMA Style

George Gitonga Inoti, Samuel Owino Onyuma, Monicah Wanjiru Muiru. Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange. J Finance Account. 2014;2(5):108-115. doi: 10.11648/j.jfa.20140205.12

Copy | Download

@article{10.11648/j.jfa.20140205.12,
  author = {George Gitonga Inoti and Samuel Owino Onyuma and Monicah Wanjiru Muiru},
  title = {Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange},
  journal = {Journal of Finance and Accounting},
  volume = {2},
  number = {5},
  pages = {108-115},
  doi = {10.11648/j.jfa.20140205.12},
  url = {https://doi.org/10.11648/j.jfa.20140205.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20140205.12},
  abstract = {This study sought to determine whether acquisitions enhance corporate financial performance. The general objective of the study was to assess the effects of acquisitions on the financial performance of the acquiring companies in Kenya. The specific objectives of the study were; to determine the effect of acquisitions on the profitability of the acquiring company and to determine the effect of acquisitions on asset utilization of the acquiring company.  Purposive sampling procedure was used to select a sample of all the acquisitions involving listed acquiring companies. Three years pre and post-acquisition financial statements of the acquiring company were examined. Key financial ratios were computed and used to determine the company’s pre and post-acquisition financial performance. Paired t-test was used to determine whether there was significant difference between the means of the two periods for each ratio. From the findings it was apparent that there was no significant difference in pre and post-acquisition ratios measuring profitability and asset utilization. The study therefore concluded that corporate acquisitions do not affect the financial performance of the acquiring company.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - Impact of Acquisitions on the Financial Performance of the Acquiring Companies in Kenya: A Case Study of Listed Acquiring Firms at the Nairobi Securities Exchange
AU  - George Gitonga Inoti
AU  - Samuel Owino Onyuma
AU  - Monicah Wanjiru Muiru
Y1  - 2014/11/18
PY  - 2014
N1  - https://doi.org/10.11648/j.jfa.20140205.12
DO  - 10.11648/j.jfa.20140205.12
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 108
EP  - 115
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20140205.12
AB  - This study sought to determine whether acquisitions enhance corporate financial performance. The general objective of the study was to assess the effects of acquisitions on the financial performance of the acquiring companies in Kenya. The specific objectives of the study were; to determine the effect of acquisitions on the profitability of the acquiring company and to determine the effect of acquisitions on asset utilization of the acquiring company.  Purposive sampling procedure was used to select a sample of all the acquisitions involving listed acquiring companies. Three years pre and post-acquisition financial statements of the acquiring company were examined. Key financial ratios were computed and used to determine the company’s pre and post-acquisition financial performance. Paired t-test was used to determine whether there was significant difference between the means of the two periods for each ratio. From the findings it was apparent that there was no significant difference in pre and post-acquisition ratios measuring profitability and asset utilization. The study therefore concluded that corporate acquisitions do not affect the financial performance of the acquiring company.
VL  - 2
IS  - 5
ER  -

Copy | Download