MERGERS & ACQUISITIONS DRIVERS AND FINANCIAL PERFORMANCE OF NON-FINANCIAL FIRMS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA

Mary Joan Kibunja, Dr. Joshua Matanda, Dr. Charles Roche

Abstract


The main objective of this study was to investigate mergers & acquisitions drivers and financial performance of non-financial firms listed at the Nairobi securities exchange, Kenya. The study specifically sought to determine the effect of market diversification, and financial synergy on financial performance of non-financial firms listed at the Nairobi securities exchange, Kenya. The study was anchored on the modern portfolio theory and financial synergies theory. With aim of achieving the aim of this study, descriptive design was employed that guided in establishing how non-financial firms’ financial performance listed at the NSE in Kenya is affected by merger and acquisitions drivers. Population for this study was 5 non-financial institutions listed at the NSE in Kenya that underwent mergers and acquisitions during the period 2016 - 2021. Utilisation of collection sheet of secondary data involving review of documents were used containing available data on statements of finance that have been made available covering a period of 6 years. Nairobi securities exchange was the source of study’s secondary data. Inferential analysis focused on use of analysis in multiple regressions as the study has more than two variables to be examined. The study found that that market diversification has positive and significant influence on financial performance of non-financial Firms listed at the Nairobi securities exchange, Kenya. Also, operating synergy was found to positively and significantly influence financial performance of non-financial Firms listed at the Nairobi securities exchange, Kenya due to reduced operating expense, consolidation of operations and synergies within the industry. The study therefore, recommends that the non-financial institutions listed on the NSE should concentrate on internal product or market development, acquisition of a firm, alliance with a complementary company, licensing of new technologies, and distributing or importing a product line manufactured by another firm. The study also recommends that these institutions should introduce new products that have technological or marketing synergies with existing product lines or industries while appealing to new customers, as well as introduce new products or services that are completely different from and unrelated to your core business.[1]



[1] Kibunja, M. J.., Matanda, J., & Roche, C., (2023). Mergers & Acquisitions Drivers and Financial Performance of Non-Financial Firms Listed at The Nairobi Securities Exchange, Kenya. International Journal of Social Science Management and Entrepreneurship, 7(2023), 406-418


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