Challenges of Mergers and Acquisitions as a Strategic Orientation at Cfc Stanbic Bank Limited Kenya

Abstract

Over the last few decades mergers and acquisitions, have become strategic instruments of growth and development of enterprises. The study was designed to examine the challenges of mergers and acquisitions as a strategic orientation in financial institutions in Kenya. The need to carry out the study arose from the gap existing in addressing the challenges faced during the merger and acquisition operation, within the integration phase. Thus, I analyzed the challenges resulting from this integration process, for I consider that these factors have a strong impact on the post-acquisition performance and they can ensure the success of integration. In conducting the study, a case study involving CFC Stanbic Bank Limited Kenya is employed. The data was collected through an interview guide and content analysis method used to analyze respondent’s views. The findings reveal that the acquiring firms are affected by changes during the integration process, by retaining the important resources or the transfer of resources from or to the acquired firms. Yet, in the integration phase, the problems may occur due to human factors, cultural incompatibility and an inappropriate management style. On the basis of these, the study recommends among others that policy makers in organizations to be aware of specific needs in merging and acquisition such as communication, coordination, planning and staff motivations in order to meet the desired strategic and financial objectives.