Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Firm Value and Performances in Merger Policy: Evidence from Indonesia

Author(s): Nopriyanto Hady Suhanda, Arifin Nur Hidayat, Amrie Firmansyah

This study aims to investigate merger phenomenon undertaken by PT Ciputra Development (CTRA) with its two subsidiaries; PT Ciputra Surya (CTRS) and PT Ciputra Property (CTRP) in 2017 associated with its performances. This paper employs a quantitative approach to examining company performance and value before and after the merger. Aspects observed to compare company performance are a stock performance in the market, financial performance, and company value. Actual return analysis is used to examine stock performance whereas independent samples T-test is employed to examine the financial performances before and after the merger. Firm value is examined using Free Cash Flow to Equity (FCFE) analysis. This study suggests higher stock performance and lowers financial performance after the merger was undertaken. Moreover, this study finds that after the merger, the firm value of CTRA calculated by different methods suggests a higher number than that before the merger which implies the right decision in undertaking merger to increase firm value.

Get the App