Comparative Analysis of Financial Performance Before and After Acquisitions in Indonesian Listed Financial Firms

Abstract

Research aims:

This study aims to analyze the differences in financial performance of financial sector companies before and after acquisitions, measured using Economic Value Added (EVA), Tobin’s Q, and Return on Investment (ROI).

Design/Methodology/Approach:

This study employs a quantitative approach with a comparative method. The sample was selected using purposive sampling from financial sector companies listed on the Indonesia Stock Exchange during the 2017–2022 period. The data, in the form of annual financial statements, were analyzed using descriptive statistics, the Kolmogorov-Smirnov normality test, and hypothesis testing through paired sample t-tests and Wilcoxon signed-rank tests.

Research findings:

The results indicate that there are no significant differences in EVA, Tobin’s Q, and ROI between the periods before and after the acquisition. This suggests that the impact of acquisitions on financial performance is not evident in the short term.

Theoretical contribution/Originality:

This study contributes by specifically focusing on acquisitions (excluding mergers), employing a combination of EVA, Tobin’s Q, and ROI, and using a recent observation period that includes the pandemic context, thereby enriching the literature on the effectiveness of acquisitions in Indonesia’s financial sector.

Practitioner/Policy implication:

The findings of this study can serve as a consideration for management, investors, and regulators in evaluating acquisition decisions and highlight the importance of post-acquisition integration strategies.

Research limitation/Implication:

The limitation of this study lies in the observation period, which only covers one year before and after the acquisition, and its focus on the financial sector. Future research is recommended to use a longer observation period and include broader sectors.