Impact of Mergers and Acquisitions on Abnormal Returns and Financial Performance of Banks Listed on the Indonesia Stock Exchange


Authors : Yumiad Fernando Richard; Apolinaris S. Awotkay; Maria Natalia Wainip Epin; Mensy Otelyo Kastanya

Volume/Issue : Volume 7 - 2022, Issue 2 - February

Google Scholar : http://bitly.ws/gu88

Scribd : https://bit.ly/3HFHEx9

DOI : https://doi.org/10.5281/zenodo.6326885

This study examines the stock market performance of Indonesian banking firm conducting mergers and acquisitions (M & A) in the period 2019. The purpose of this study is to investigate the impact of M&A agreements on the performance of takeover banks. A total of 3 firm involved in the 2019 M&A agreement were sampled in this study. This study uses two methods, namely the event study method with a market model approach and an accounting approachbased method, to examine the impact of M&A. The results showed that abnormal returns measured using CAR were not better after M&A and financial performance proxied by ROA, ROE, BOPO, gross NPL, and LDR also showed poor performance after M&A. However, the firm's size showed an increase and was statistically significant after M&A.

Keywords : Mergers, Abnormal Returns, Financial Performance, Banking

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