Mergers and acquisitions performance within South African chemical industry: Pursuit of improved financial performance and economies of scale

Abstract

Mergers and acquisitions (M&A) are used globally by companies to improve shareholders’ wealth, financial performance, and obtain economies of scale. This study aimed to examine the role of M&A on the performance of companies within the South Africa chemical industry. The study adopted a survey-based methodology to measure performance post-merger. The sample size of the study was 102 individuals, and data was gathered using an expert sampling technique via an online self-administered questionnaire. The data was analyzed using SPSS version 25. The results demonstrate that both financial performance and economies of scale are statistically significant predictors of the role of M&A on performance postmerger. The study contributes to the body of knowledge by exploiting a multidimensional nature of performance, as surveybased methodology uses both financial and non-financial parameters. It is, therefore, important for managers to understand that M&A within the South African chemical industry; are done to achieve financial performance.