Browsing by Author "Lidia Samuel"

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    “Drivers of Merger and Acquisition Decision in Ethiopian Private Banks”
    (Addis Ababa University, 2025-09) Lidia Samuel; Dakito Alemu (PhD)
    Mergers and acquisitions refers to where two or more financial entities combine corporate resources to operate as a unit with an aim of improving their performance. Despite recent developments in every sector of the economy, the practice of mergers and acquisitions is a fairly new concept to the Ethiopian banking industry. This research aims to investigate the factors driving merger and acquisition (M &A) activity in Ethiopian Banks. With the Ethiopian government's push toward liberalization, including increased minimum capital requirements and the entry of foreign banks, local banks face heightened regulatory and competitive pressures which may lead banks to consider mergers and acquisitions. Hence, understanding the factors that may drive it is crucial. The study employed quantitative approach, using structured questionnaire to gather comprehensive insights into the perception of Ethiopian Commercial Banks towards M&A drivers. Primary data was collected from Management members of 16 private banks selected using stratified random sampling. With a response rate of 92%, 221 questionnaires have been returned and were valid for data analysis. The quantitative data was analyzed employing descriptive and inferential analysis (i.e. correlation analysis and multiple regression analysis) and using SPSS. The findings of the multiple regression indicated that only four of the predictor variables i.e. financial performance improvement, compliance with regulatory requirements, market expansion, and cost-saving synergies are the most influential factors motivating M&A decisions. Conversely, branding, diversification, and survival were not found to be statistically significant. These findings highlight regulatory compliance and financial synergies as pivotal for policymakers during sector liberalization. With an adjusted R² of 0.788, the model explains approximately 78.8% of the variance in M&A decisions, indicating a strong explanatory power. The study offers important insights for policymakers, regulators, and bank executives in planning for strategic consolidation to build a resilient and competitive banking sector in Ethiopia. Finally recommendations are made based on the findings of the study.