Mergers and Acquisitions Activity and Shareholder Value in Nigerian Financial Services

Mergers and acquisitions represent transformative corporate events in the financial services sector, with significant implications for shareholder value, market concentration, and systemic financial stability. This study examines the relationship between mergers and acquisitions activity and shareholder value creation in Nigerian financial services firms, focusing on transactions completed in the banking and insurance sectors between 2015 and 2023. Event study methodology is employed to calculate abnormal returns around merger announcement dates and completion events, using both the market model and the constant mean return model as benchmarks. The study also conducts a post-merger financial ratio analysis comparing three-year pre- and post-merger performance on return on assets, cost-to-income ratio, and non-performing loan levels. The theoretical framework integrates the synergy hypothesis, the market for corporate control theory, and the hubris hypothesis to provide multiple interpretive lenses for the observed outcomes. The geographic dimension of the analysis considers whether cross-regional acquisitions, such as South West acquirers targeting North East or North West targets, generate different value outcomes compared to geographically proximate transactions. Existing literature from Nigeria's banking consolidation episode of 2005 and 2006 provides a historical benchmark, while this study extends the analysis to the more fragmented merger activity of the subsequent decade. Findings are expected to benefit corporate development teams, institutional shareholders, and the Central Bank of Nigeria's banking supervision department on evaluating future consolidation initiatives. Keywords: mergers and acquisitions, shareholder value, event study, financial services, Nigerian banks