A STUDY ON HOW MERGER AND ACQUISITIONS AFFECT FIRM PERFORMANCE

Abstract

This study was conducted to examine the performance of publicly traded companies listed on the Indonesia Stock Exchange after they carried out a merger and/or acquisition during the period 2014-2021.The sample was selected using a non-probability purposive sampling method. The sample size used consists of 48 companies that went through mergers and acquisitions within the period of 2014 to 2021.Data is analyzed using a descriptive statistical test, outlier test, normality test and hypothesis test (t-test). This study used paired sample t-test to analyze two different paired samples using the STATA program.Statistical evidence found that company Financial Performance measured by Gross profit margin (GPM), Operating profit margin (OPM), Net profit margin (NPM) , return on equity (ROE) , return on asset ( ROA), earning per share (EPS), and return on capital employed (ROCE) are affected significantly by mergers and acquisitions. This confirms that mergers and acquisitions contribute to the differences in the financial performance of acquiring companies in indonesia The primary aim of this research is to explore the differences in Gross profit margin (GPM), Operating profit margin (OPM), Net profit margin (NPM) , return on equity (ROE) , return on asset ( ROA), earning per share (EPS), and return on capital employed (ROCE) caused by mergers for publicly listed companies in Indonesia. The secondary goal is to scrutinize and assess the extent to which mergers and business takeovers influence these financial indicators for the selected publicly listed companies in Indonesia.