The Effect of Merger and Acquisition (M&A) on Financial Performance: a Mixed-Methods Analysis of Ethiopian Shipping and Logistics Service Enterprise.
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Date
2025-06-30
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A.A.U
Abstract
This study investigates the financial impact of the 2016 merger of Ethiopian Shipping Lines
Share Company, Maritime and Transit Services Enterprise, Dry Port Enterprise, and Comet
Transport Share Company, forming the Ethiopian Shipping and Logistics Services Enterprise
(ESLSE). Employing a mixed-methods approach, we analyzed pre-merger (2010–2011) and
post-merger (2022–2023) financial data. Specifically, the study utilized ratio analysis to evaluate
changes in profitability, liquidity, efficiency, and leverage ratios. Descriptive analysis was also
applied to the pre-merger (2010–2011) and post-merger (2022–2023) financial data to highlight
trends and key differences in financial performance over these periods. The study concludes that
while the merger enhanced cost efficiency and reduced financial risk, it negatively impacted
liquidity and shareholder profitability. We recommend urgent liquidity management, a thorough
investigation into the ROE decline, optimized leverage strategies, and holistic performance
monitoring. This research offers empirical insights into merger outcomes within Ethiopia's
logistics sector, informing future consolidation strategies in emerging economies.