CRITICAL EVALUATION OF THE PROCESSES OF MERGERS, ACQUISTIONS AND TAKE-OVERS IN NIGERIA: A CASE STUDY OF THE BANKING REFORMS SYSTEM

AUTHOR: AKANDE, ROWLAND ALABA 

FACULTY: LAW

AFFILIATION: NNAMDI AZIKIWE UNIVERSITY, AWKA

The prevailing global economic recession has given rise to a number of survival recipes. In the corporate scene, mergers, acquisitions and take-overs have emerged as one of the corporate survival strategies. While merger involves the fusion of the understandings of two or more companies into an entity in which members of the amalgamating companies become members of the emerging entity. Acquisition entails the taking over of the shares of an offeree companies with a view to obtaining voting control. On the other hand, a take-over is the acquisition by one company of sufficient shares in another company to give the acquiring company control of that other company .In this regard, acquisition connotes a take-over: that is, the acquisition of control over the target company. Thus, in business and commercial terms, the expression “acquisition” is properly used interchangeably with the term “take-over” as distinct from a merger. It is suggested that with the definition of “merger” and “take-over” in the Act, the mix-up in the meaning of these terms should now come to an end. This research work will also analysis mergers, acquisitions and take-over in the Nigerian banking reforms system as was chosen as case study. The purpose of the study is to examine mergers, acquisitions and takeover of banking reforms system in Nigeria. Mergers, acquisitions and take-over were recommended to the banks by the immediate past Governor of Central Bank of Nigeria, Professor Charles Chukwuma Soludo; as a means to beef up in their capital base to twenty five billion naira (N25 billion) approximate of $181 million before the end of 31st day of December,2005. The legal framework for effecting mergers, acquisitions and take-over is set out in two principal enactments namely; the Companies and Allied Matters Act,Cap.59 Laws of the Federation of Nigeria(LFN),1990 (presently Cap. C20, LFN, 2004) and the Security and Exchange Commission Act, Cap.406 of LFN, 1990 (now Cap.S3, S.E.C, 2004). The provisions of these enactments are critically appraised in this work. The objective of this work is to outline the mergers, acquisitions and take-overs in Nigeria banking system. The mergers, acquisitions and take-overs process in Nigeria has become in the last few years, something that needs an expert attention and academic interest among scholars in the field. This is because of the growing nature of the Company Law and Management; the pivotal role of the Security and Exchange Commission, the Companies and Allied Matters Act, 2004 etc. The work generally is to evaluate the mergers, acquisitions and take-overs process in Nigeria, a better aid in the understanding of the various steps during merger or acquisition. The advantages and disadvantages of merger and acquisition, and also scholastic and authorities on the topic. The research work adopts a multiple research approach. The first involves a review of relevant literatures on the topics. The second approach deals with a critical and comparative analysis of the relevant Nigeria Laws and other jurisdictions. The last approach involves informal discussions and interviews with senior officials of the relevant agencies handling mergers, acquisitions and takeover transactions. The research work shows that mergers, acquisitions and take-over are on the increase in Nigeria. The work shows also that the recent banking reforms in Nigeria was successful and needs constant monitoring by the Central Bank of Nigeria, the Security and Exchange Commission, Nigeria Stock Exchange Commission and Economy and Financial Crime Commission for encouragement and full compliance with the guideline on consolidation Although, the Company and Allied Matter Act, 1990 (as incorporated by reference in Cap.C20 of LFN, 2004) has made substantial provisions to regulate this activity, there are obvious lapses in some of the procedures. Moreover, some of the statutory provisions are very technical. It is hoped that when judicial pronouncement begin to pour in and the relevant amendments are effected, mergers, acquisitions and take-over in Nigeria would become less cumbersome.

TO VIEW THE FULL CONTENT OF THIS DOCUMENT, PLEASE VISIT THE UNIZIK LIBRARY WEBSITE USING THIS LINK, http://naulibrary.org/dglibrary/admin/book_directory/Thesis/10381.pdf

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