Impact of Merger and Acquisition on Financial Performance in Financial Service Sector

Impact of Merger and
Acquisition on the financial
performance financial service
factor

Table of Contents
CHAPTER 1: INTRODUCTION ...................................................................................................3
Overview of the topic.............................................................................................................3
Problem statement..................................................................................................................4
Research aim..........................................................................................................................4
Research objectives................................................................................................................4
Research questions.................................................................................................................4
Rationale of the research........................................................................................................5
CHAPTER 2: LITERATURE REVIEW ........................................................................................6
What factors are leading financial service sector towards increasing trend of Merger and
Acquisition in recent years?...................................................................................................6
REFERENCES ...............................................................................................................................9

CHAPTER 1: INTRODUCTION
Overview of the topic
Merger and acquisition are considered as the most common term into the business where
consolidation of companies assets are being performed through different financial transactions.
When one company takes over another company and establishes the company as a new identity
or owner then this is considered as acquisition (Alhenawi and Stilwell, 2019) . On the other
hand, merger is considered as the method in which two firms of almost same size combines
together and form a new single identity rather than remaining separate. These methods are called
as business strategy in which different objectives of the business can be addressed such as
business expansion and profit procurement. In the current time mergers and acquisition are
interchangeably used by different business so that to define their business and to manage
different business functions. The scope of merger within an organisation is high as two firms are
get combined and would be helpful in attaining business objectives in direct or indirect manner.
Using merger and acquisition as a business strategy organisation may seek to avail various
opportunities in order to maximise their wealth and business objectives. The principle of merger
and acquisition would create synergy value to the organisation in which opportunities for earning
higher revenue and lowering of cost of capital can be acquired (Gadzo, Kportorgbi and Gatsi,
2019). In the year of global trend for merger and acquisition has reached to its new heights and
around the world more than 62000 merger and acquisition took place which is 24% higher than
the last year. There are certain reasons for increasing mergers and acquisition into the business
such as increasing need of technology, market trends, customer engagement and different others.
In order to align with such factors decisions are taken by the organisation in respect of merger
and acquisition. The current research report is based on the factors that are driving growth of
merger and acquisition in terms of UK financial institutions. Financial sectors are regarded as
boon for the economic growth so that continuos upgradation of financial sector is necessary. In
different countries there are various processes which are being exerted by service sector and this
is related with overall effectiveness of the nation. Financial institutions are integrated with
government and this will undergo under remarkable changes in the economic reform. Good
understanding of determinants of merger and acquisition is to assist practitioner so that to
identify essential factor on which decision of merger and acquisition are based.