THE INFLUENCE OF CROSS BORDER ACQUISITIONS, MERGERS AND JOINT VENTURES ON MARKET VALUATION OF SOUTHEAST ASIAN MULTINATIONAL ENTERPRISES:

• Main Author: Farhan, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63780
• Institution: Institut Teknologi Bandung

Multinational corporations from Indonesia and Malaysia have been rapidly expanding their operations across borders in the last two decades. To date, there has been little research about how the announcement of cross-border acquisitions, mergers and joint ventures influence the market valuation of MNEs in this region. Using cross-border acquisition data from 2001 - 2021, this study contributes by analyzing how the announcements of cross-border acquisitions, mergers, and joint ventures influence the stock price of Indonesian and Malaysian multinational enterprises and whether the value of the deals and the presence of free trade agreements between the target and acquirer countries had the moderating effect on it. The sample consisted of 57 confirmed and completed acquisitions, mergers, and joint ventures performed into foreign countries within a 20-year time frame. Results have revealed that these announcements had a positive impact on stock price although the deal value and the presence of trade agreements did not. The insights of this study can help Managers and financial analysts when it comes to knowing to what extent CBA announcements could affect a company’s stock price change. They also are beneficial for Investors in the decision making of picking short-term stocks which could potentially yield profits. Future research with more variables could be conducted in the future when there are more completed deals of cross-border acquisitions, mergers, and joint ventures from Indonesian and Malaysian companies.