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The Effect of Mergers and Acquisitions on the Financial Performance of Listed Petroleum Firms in Kenya: A Case Study of Total Kenya Plc

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dc.contributor.author Kokonya, Natalie
dc.date.accessioned 2020-02-24T14:37:33Z
dc.date.available 2020-02-24T14:37:33Z
dc.date.issued 2019
dc.identifier.uri http://erepo.usiu.ac.ke/11732/5533
dc.description A Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirements for the Degree of Masters in Business Administration (MBA) en_US
dc.description.abstract The general objective of the study was to examine the effect of mergers and acquisitions on the financial performance of listed petroleum firms in Kenya using a case study of Total Kenya PLC. The specific objectives of the study were to evaluate the effect of asset management on the financial performance of listed petroleum firms, evaluate the effect of shareholder’s equity on the financial performance of listed petroleum firms and evaluate the effect of capital structure on the financial performance of listed petroleum firms. The study adopted a descriptive research design, the event study approach and case study approach, because this design allowed the researcher to examine the effect that the acquisition event had on Total Kenya PLC’s financial performance, as well as evaluate the relationship between the variables before and after the acquisition event. The population of this study comprised of Total Kenya PLC. The study selected a census sample using the purposive method because it allowed the study to focus on characteristics of the population. Secondary data was collected from Total Kenya PLC’s audited financial statements. The data analysis methods that were employed by the study were descriptive and inferential in nature. Data was analysed using the Statistical Package for the Social Sciences (SPSS). The findings revealed that asset management was positively correlated to financial performance at a statistically significant level of r = 0.859, meaning that asset management had a positive influence on Total Kenya PLC’s financial performance. The results of the effect of shareholders’ equity on financial performance revealed that shareholders’ equity was positively correlated to financial performance at a statistically significant level of r = 0.913, meaning that the shareholders’ equity had a positive influence on Total Kenya PLC’s financial performance. The results of the effect of capital structure on financial performance found that the capital structure was weakly and negatively correlated to financial performance at a level of r = -0.054, meaning that the shareholders’ equity had a positive influence on Total Kenya PLC’s financial performance. The study concluded that there was a positive, statistically significant relationship between financial performance and asset management and that 89.8% of the variations in the financial performance of Total Kenya PLC could be explained by changes in the firm’s asset management. For the shareholders’ equity, there was a positive, statistically significant relationship between financial performance and shareholders’ equity and 96.5% of variations in Total Kenya PLC’s financial performance could be explained by changes in the shareholder’s equity. Lastly, there was a weak negative relationship between financial performance and capital structure, with 0.03% of variations in the firm’s financial performance being attributed to changes in capital structure. The study recommended that in order to improve the return on assets ratio, the firm’s management should work on reducing operational costs. To increase the return on equity, the firm’s management can distribute idle cash by paying out dividends to shareholders and buying back shares. Also, to improve the firm’s debt to equity ratio, the firm’s management can take measures to reduce its liabilities. Finally, further studies should be undertaken to examine the effect of mergers and acquisitions on the financial performance of Kenyan firms to establish trends over longer periods of time, using different combinations of variables that are both qualitative and quantitative in nature. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Mergers and Acquisitions en_US
dc.subject Financial Performance en_US
dc.subject Listed Petroleum Firms en_US
dc.subject Kenya en_US
dc.subject Total Kenya Plc en_US
dc.title The Effect of Mergers and Acquisitions on the Financial Performance of Listed Petroleum Firms in Kenya: A Case Study of Total Kenya Plc en_US
dc.type Thesis en_US


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