Mergers and Acquisitions as Survival Strategy

As competition is fierce especially in the courier industry where professional expertise, skills, knowledge and efficiency are king, companies can only survive by improving their efficiency, diversification and increasing their market share.
Abayomi Sanya, managing director/chief executive officer ,……. has explained that mergers and acquisitions are almost a daily occurrence in life as the economy today is dynamic and cannot be predicted with great certainty. He said mergers and acquisitions are forms of business re-organization or combinations that are embarked upon by companies or industries with the aim of creating synergies that will make them to operate effectively and efficiently.
Sanya said few of the courier companies operating in the courier industry are listed on the Nigerian Stock Market as they face the challenges of capital inadequacy, exchange rate instability, poor regulatory oversight and insider abuse, unstable government policies, lack of expertise and huge debt profile. He therefore said that synergy, achieved from business combinations leads to cost saving and revenue enhancement. As a result of the pooling of assets and interests together, Sanya said greater result will be achieved than when the parties were independent. According to him,  synergy results into  more effective management , greater economies of scale, improved operation techniques or business  strategies, efficient combination of resources and redeployment of assets to more profitable uses.  Further, he said it will also lead to reduction in operational costs, formation of a stronger human capital base and ultimately improve the profit margin.
Sanya in his presentation at the 2nd anniversary lecture organized by Bowill Errands, a foremost courier company ,  emphasized that mergers have become indispensable in the business world as many businesses cannot overcome the challenges that arise as a result of a dynamic environment saying that business firms now have to face increased competition not only from firms within the country but also from international competitors .