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Analysis Of Factors Causing Merger And Acquisition: Case Study Of Banking Sector In Pakistan

Author

Listed:
  • Atif Hassan

    (University of Management and Technology, Lahore)

  • Rizwana Bashir

    (Bahria University Lahore Campus)

  • Rabia Shakir

    (University of Karachi, Karachi)

Abstract

Purpose The trend of merger and acquisition is increasing in the Pakistani banking sector.The purpose of this study is to find out the basic factors which beguile banks for the merger and acquisition.Methodology/Sample In this study researcher took the sample size 2 as two merger cases one is happened in year 2010 Faysal Bank & RBS and one in 2007 SAMBA & CCB.Researcher critically analyzed the pre and postmerger performance of FAYSAL BANK & RBS and SAMBA &CCB with the help of five financial ratios, Net interest margin ratio, Gross margin ratio, ROE, Debt ratio, Debt to equity ratio.Researcher utilized the ttest for testing the hypothesis.This study has adopted exploratory research as its first research technique which helped us in clarifying the research problem.Many constraints have been faced during this study for example bankers were hesitating to fulfill the questionnaires.Findings The result of this study suggests that after merger and acquisition firms can increase synergy and can decrease the risk of solvency but merger and acquisition is not significant for the shareholders’ wealth result will change with the different case.Practical Implications This study acquires the knowledge about the emerging trend of merger and acquisition and in future implement this knowledge in an effective way.In addition to that, this study will provide information that why companies take the decision of merger and acquisition.

Suggested Citation

  • Atif Hassan & Rizwana Bashir & Rabia Shakir, 2016. "Analysis Of Factors Causing Merger And Acquisition: Case Study Of Banking Sector In Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(1), pages 328-346.
    • Handle: RePEc:aib:ibtjbs:v:12:y:2016:i:1:p:328-346
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2016.121.19
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    References listed on IDEAS

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    1. Katerina Simons & Joanna Stavins, 1998. "Has antitrust policy in banking become obsolete?," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 13-26.
    2. Mohsin S. Khan & Abdelhak S. Senhadji, 2003. "Financial Development and Economic Growth: A Review and New Evidence," Journal of African Economies, Centre for the Study of African Economies, vol. 12(Supplemen), pages 89-110, September.
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