The synergistic effect of M&A actions has also not been able to increase the value of the company and its shareholders. The findings of Wibowo and Hamdani's study (2020) indicate that corporate M&A activity has a negative effect on the generation of corporate value. Many cases of failed mergers and acquisitions occurred. ( 2020) proved that after deciding to conduct M&As, the financial performance of banks in Pakistan deteriorated. The decrease in execution was brought about by frail interest, which caused the volume of animal feed and commercial farm day-old chicken (DOC) to decline (Julian, 2020). Meanwhile, net profit fell into Rp155.11 billion (81%). JPFA's financial performance recorded a decline to Rp16.91 trillion (7%). PT Japfa Comfeed Indonesia (JPFA) is still vulnerable to being overshadowed by a decline in chicken demand amid the COVID-19 pandemic. One example occurred in the acquisition of So Good. Many companies fail to increase corporate performance after mergers and acquisitions, mainly when they are carried out during a pandemic that is clearly full of high uncertainty. However, some empirical studies contradict the positive results of company performance after M&As. Bank Mandiri is regarded by the public as an example of a banking sector that has successfully completed mergers and acquisitions (Wulandari, 2020). ![]() In Indonesia, it is still one of the largest banks today. Bank Mandiri, for example, was formed by the merger of the Indonesian Development Bank (Bapindo), Bank Dagang Negara, Bank Export–Import Indonesia, and Bumi Daya Bank. Furthermore, the presence of successful M&As can motivate and attract the attention of business actors to conduct M&As. This means that mergers and acquisitions are still a viable strategic option for growing businesses. The significant increase in mergers and acquisitions from 2019 to 2020 demonstrates that most business actors are extremely confident in conducting mergers and acquisitions due to their diverse motivations and goals. Meanwhile, acquisition transactions may be conducted within the context of acquisitions because the acquiree finds it difficult to survive in difficult circumstances (Julian, 2020). According to Sanny Iskandar, Chairman of the National Indonesian Employers Association (Apindo) for Property and Economic Zones, the difficult conditions caused by the coronavirus pandemic may encourage businesses to merge to survive. Based on data from the Business Competition Supervisory Commission (KPPU), the Supreme Court's notification in 20 was 120 and 195 cases, respectively, indicating a 62.5% increase in M&As (KPPU, 2019, 2020). This is evidenced by the increasing number of mergers and acquisitions in Indonesia during the pandemic. This study contributes to the M&A literature by examining the role of MA in the short- and long-term performance of acquiring firms following M&As in Indonesia.īusiness competition and environmental conditions cause companies to improve their performance through mergers and acquisitions (M&A). Investors and potential investors might consider managerial ability in choosing investments in companies after an M&A. This result confirms that the higher ability of the acquirer's manager will ensure a successful M&A in the long run. ![]() We find that managerial ability has a positive impact on MTBR operating and BHAR stock performance. We used regression and difference analysis to analyze the data. The research sample consists of 153 M&A cases conducted by companies registered with the Business Competition Supervisory Commission in Indonesia between 20, and the performance till 2020. Two metrics are used to assess short- and long-term performance: the market-to-book ratio (MTBR) as an indicator of operating performance and the buy-and-hold abnormal return (BHAR) as an indicator of stock return performance. This study aims to reveal the role of the acquirer's managerial ability in mergers and acquisitions based on short- and long-term performance as well as the type of M&A. Managers' ability to make strategic decisions may determine whether a merger and acquisition is successful. Managers must be able to use company resources efficiently to maintain and improve competitiveness and sustainable advantages. Companies in difficult financial situations may seek to survive through mergers and acquisitions.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |