The Financial Performance Of Indonesia’s Listed Acquiring Companies Post Acquisitions

Abstract

This research provides a comparison of consolidated financial performance of the public listed acquiring companies in Indonesia up to three years post acquisitions and one year before the acquisitions in order to observe whether the post-acquisition financial performance of the selected companies are better than the pre-acquisition, and observe the factors that caused change in the financial performance. This research adopted quantitative descriptive research to describe whether a set of quantitative variables after an event is significantly different from those before the event. This research also provides observations on key drivers causing the difference between the quantitative variables before and after an event. This research adopted purposive sampling and the samples were selected from the acquiring companies listed in Indonesia Stock Exchange. Profitability, leverage, and liquidity ratios are utilized as indicators for the financial performance of the acquiring companies. Wilcoxon Signed Rank Test is used to perform hypothesis test on two set of samples to determine whether those samples are significantly different. The hypothesis test shows that only ROA and ROE are significantly different pre and post acquisitions. With reference to publicly available data, 21.0% of total acquisitions indicates contribution to the improvement in financial ratios of the acquiring companies.