An Assessment Of Mergers And Acquisitions Motivation And Framework Adherence Vis-À-Vis Value Creation Among Internet Service Providers In Kenya

ABSTRACT

Mergers and acquisitions (M&A) are a key growth and expansion strategy being embraced by many organizations especially in the telecommunication sector. M&A in organizations are usually guided by the top executives and management. The success of the M&A depends on the executives and top management’s understanding of the M&A framework required to be applied taking into consideration the M&A goals and objectives. The framework used to execute pre and post M&A is very crucial to ensure buy-in from all stakeholders both internally and externally for business continuity and sustainability, while maintaining brand confidence, trust and loyalty. The purpose of this research was to analyze the mergers and acquisitions framework of the Internet Service Provisioning sector in Kenya in light of standard literature-derived framework - the Watson Wyatt Deal Flow Model. A three-fold analysis approach was applied – descriptive statistics, content analysis and MannWhitney U Test as an inferential statistics tool. Findings indicate that strategic, market and economic reasons were found to be the main drivers of mergers and acquisitions. Additionally, the pre and post implementation periods were the most ineffectively executed. In summation, M&As in Kenya are rarely informed by a defined framework and minimal stakeholder involvement is evidenced in the process. The resulting situation is therefore a shortfall in anticipated benefits of the M&As. It is recommended that companies in the space consider switching to a defined implementation process.