MERGERS AND ACQUISITIONS ON THE MARKET PERFORMANCE OF COMMERCIAL BANKS IN KENYA: A CASE STUDY OF THE KENYAN BANKING INDUSTRY
Abstract
The purpose of this study was to determine the influence of mergers and acquisitions on the market performance of commercial banks in Kenya. Mergers and Acquisition are primarily pursued in effort to strategically position business in a competitive sector. However, the role of mergers and acquisitions on the firm’s market position post-merger is less studied thus informing the need for this study. Four market driving factors notably; volume of business transactions, customer base value, capital investment value and competitive advantage were examined in the study in relation to mergers and acquisitions within the banking sector. The study employed descriptive survey technique as the research methodology. Target population included frontline marketing and business development practitioners in the banking sector. All the respondents were employees of listed commercial banks in Kenya, which accounted for 53% of the total market share in the financial services industry. Linear regression analysis was utilised in analysing the data collected from the field survey. The study established that mergers and acquisitions accrued positive effect for commercial banks, recording outcomes such as; increased volume of business transactions, increased customer base value, access to more capital investment and enhanced competitive advantage. The study concluded that successful mergers and acquisition deals result in boosting the firm’s market position in all areas of customer value, capital investment and competitive advantage. The study recommended for effective and open communication of information relating to mergers and acquisitions within the banking sector as it impacts on customer confidence and loyalty. The study also recommended for increased investments towards product and services quality improvement post-merger in order to maximise prospects for competitive advantage.
Key Words: Mergers and Acquisitions, Commercial Banks in Kenya
CITATION: Maundu, J. (2020). Mergers and acquisitions on the market performance of Commercial Banks in Kenya: A case study of the Kenyan banking industry. The Strategic Journal of Business & Change Management, 7(3), 1564 – 1575.
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DOI: http://dx.doi.org/10.61426/sjbcm.v7i3.1764
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