POST-MERGER FINANCIAL AND STOCK PERFORMANCE ANALYSIS
Today�s, there is a phenomenon in business world, a way to expand business activities by doing business combination. This research is focusing on one of business combinations which is merger. Merger is a combination of two (or more) firms in which one firm survives under its own name while the oth...
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| Main Authors: | , |
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| Format: | Theses and Dissertations NonPeerReviewed |
| Published: |
[Yogyakarta] : Universitas Gadjah Mada
2012
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| Subjects: | |
| Online Access: | https://repository.ugm.ac.id/98844/ http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=55068 |
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| Institution: | Universitas Gadjah Mada |
| Summary: | Today�s, there is a phenomenon in business world, a way to expand
business activities by doing business combination. This research is focusing on
one of business combinations which is merger. Merger is a combination of two (or
more) firms in which one firm survives under its own name while the other ceases
as a legal entity. The general reason for conducting merger is to gain synergy
between acquiring company and target company.
Despite of its many values that can be obtained by merger activity, such as
to overcome financial problem, expose strategic opportunities and improve
operational efficiency, this activity is also vulnerable to fail. The causes of these
failures include compensation for managers, corporate culture and clarity of the
fate of employees post-merger. The objective of this research is to determine the
effect of merger in company performance and the shareholders� welfare.
This research used data for five financial ratios (current ratio, total assets
turnover ratio, debt ratio, return on equity and price per earnings ratio) to measure
the company�s financial performance and stock price to measure the share
performance from year 1998 until 2008. The total sample is 10 companies, based
on criteria the non-financial companies that listed in Indonesia Stock Exchange
and merged in period 2000-2008.
The t-test of paired two samples means, both for financial and stock
performance analysis will be used to compare means the variables at before and
after merger. As the result, financial performances in two years before and two
years after merger are not statistically significant different. The other results,
abnormal return during windows period, in 45 days before and 45 days after
merger are statistically significant different between stock performance before and
after merger. From the analysis, it can be conclude that merger does not have
positive influence to the financial and stock performance. This is because
companies do not pay attention to the aspects that can cause failure of the merger. |
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