THE ROLE OF MERGERS AND ACQUISITIONS AS A SURVIVAL TOOL FOR ORGANIZATIONS IN NIGERIA
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
The increase in oil boom in the 70 was an era of huge and expensive prospect of doubtful utility and viability. However, the heavy dependence on oil and imported input rendered the Nigerian economy to be sensitive to external shocks with the collapse of the world oil market in the mids 1981, an economic crisis emerged in Nigeria, various control measures were put in place in order to correct the disturbing situation between 1982 1985 but these measures failed to deal effectively with the fundamental economic and financial problems confronting the economy which was deteriorating.
The nation began to face a situation of persistence and deteriorating balance of payment problem, the external debt continually rise, the emotion of international credit worthiness and the acute shortage of raw materials and consumer goods, as agriculture suffered and severely, neglected, the country (Nigeria) was at the point of collapsing.
Considering the above circumstances, there is need for national economic reform which the federal government eventually came up with Structural Adjustment Programme (SAP) in 1988 as a strategy to end the deformation of the nation economy and achieve a turn around in the fortunes.
The current global economic depression facing the world has been described by the world economic and financial experts as the longest and deepest depression in the post war period. Major industrial developed countries share in this performance characterized by declining growth rate, high inflationary pressure, increase in number of unemployment and this trend had serious adverse effect on the economic of developing countries of which Nigeria is included.
The present development is quite affecting a substantial number of Nigeria contemporary business most of them are on the path of decline, leading to folding up of some companies and many others laying off their staff and equipment as a result of operational hardship with lack of ability to expand and decline in sales volume as well as profit.
With the present difficult situation in the Nigeria businss environment. There is need for businesses to be re-structured for survival in response to changes that is occurring in the economic environment either a company decide whether to acquire, merge or sell part or whole of its existing business thus, given birth to a stronger, bigger and more profitable outfit that is capable of surviving amidst strong competition.
1.1 HISTORICAL BACKGROUND OF OANDO NIGERIA PLC
Oando Plc commence its business operation as a petroleum marketing company in Nigeria in 1956 under the name ESSO West Africa Incorporated a subsidiary of Export Corporation of the USA. In 1969, the company was incorporated under Nigeria laws as ESSO standard Nigeria Limited. In 1976, the Nigeria Government brought ESSO interest and thus, became the 100% owner of the company. The company was then rename Unipetrol Nigeria Limited.
On 1st March, 1991 the company became a public limited company and was known as Unipetrol Nigeria Plc in the same year, 60% of the company shares was sold to the Nigeria public under the first phase the then privatization exercise and the company was quoted on the Nigeria stock exchange in February 1992.
