Comparative Analysis on Public Companies’ Financial Performance Before and After Acquisition (Towards Acquiring Company that Registered in Indonesian Stock Exchange in the Period of 2010-2012)

Abstract

Acquisition is a take-over, some or all shares of other companies so that the acquirer has the right of control over the target company. This study aims to analyze the effect of acquisition on acquiring firm's financial performance which include the company liquidity, debt level, profitability, activity level and value. The sampling technique that is used in this research is purposive sampling. Population for this research encompasses public company that are registered in BEI that has performed acquisition and it is announced in the period of 2010-2012. There are 7 companies that are able to fulfill the criteria given. Data analysis method that is used are Kolmogorov Smirnov and Wilcoxon Signed Rank Test. Kolmogorov Smirnov is used to test how significant the difference is. Wilcoxon test on the financial ratios for average 3 years before and 3 years after acquisition shows decrease of company liquidity and profitability, and activity ratio. In the other hand, it also shows increase in company debt level and value. Those are consistent with general characteristic of company performing acquisition.