Impact of mergers and acquisitions in the financial sector of the Nairobi Securities Exchange - an event study approach
Date
2015-11-30
Authors
Chege, Kamau Brian
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
This paper examines the impact of mergers and acquisitions in the financial services firms listed on the NSE on shareholder wealth in Kenya during the period 2000-20015. With the use of event study methodology, we reject the "semi-strong form" of Efficient Market Hypothesis (EMH) of the Nairobi Securities Exchange. We find that thirty days and ten days prior to the announcement of a merger and acquisition, shareholders receive considerable and significant positive cumulative average abnormal returns (CAARs). Also the results show that significant negative CAARs after the announcement of the deals. The overall results indicate that bank mergers and acquisitions have an effect on the shareholder wealth as the y significantly affect the share prices of the acquiring firm.
Description
Submitted in partial fulfillment of the requirements for the Degree of Bachelor of Business Science in Financial Economics at Strathmore University
Keywords
Mergers, Acquisitions, Nairobi Securities Exchange, Event Study Approach