EFFECT OF BANK MERGERS AND ACQUISITION ON RETURN OF SHAREHOLDERS INVESTMENT

ABSTRACT This study examines the effect of mergers and acquisitions (M&As) on the returns of shareholders' investments, using Access Bank Plc as a case study. The research investigates key financial indicators, including profitability, market share, liquidity, and market valuation, to determine their impact on shareholder wealth. The study adopts an ex-post facto research design, utilizing secondary data collected from the published financial reports of Access Bank Plc and stock market data from the Nigerian Exchange Group (NGX). Regression analysis is employed to evaluate the relationships between M&As and shareholder returns, with Return on Equity (ROE) serving as the dependent variable. The findings reveal that M&As do not have a statistically significant impact on shareholder returns. Profitability, market share, and liquidity exhibit negative but insignificant effects on ROE, suggesting that the expected financial benefits of M&As may be offset by integration challenges and increased operational costs. Conversely, market valuation demonstrates a positive relationship with ROE, though it remains statistically insignificant, indicating that investor sentiment and market conditions play a crucial role in determining shareholder wealth. The study concludes that while M&As may provide strategic advantages such as increased market presence and operational efficiency, their direct impact on shareholder returns is limited. It recommends that financial institutions focus on post-merger integration strategies, cost management, and market positioning to enhance shareholder value. Additionally, regulatory bodies should ensure policies that promote transparency and efficiency in M&As activities to maximize financial stability and investor confidence. This research contributes to the growing body of literature on M&As in the Nigerian banking sector and provides valuable insights for investors, policymakers, and financial analysts seeking to understand the long-term implications of corporate consolidations on shareholder wealth.