EFFECTIVENESS OF APPLICATION OF ACQUISITION IN ENERGY SECTOR AND MINING COMPANIES IN INDONESIA

Abstract

One alternative that can be considered by company management to improve the performance and appearance of the company is through business development. This business development can be done by expanding the business , both internally and externally. Internal expansion can be done through the efficiency and effectiveness of the company's resources. While external expansion can be in the form of a business combination with the aim of obtaining synergy benefits, that is benefits that cannot be achieved if the companies work separately, one of them is by conducting acquisitions. In general, the purpose of the acquisitions is to get synergy or added value. The merger can provide benefits for the company, including increased capabilities in marketing, research, managerial skills, technology transfer, and efficiency in the form of reducing production costs (Hariyani & Serfianto R, 2011). What has been done by energy and mining companies at this time when it was difficult to find new reserves, the company began to carry out mergers and acquisitions to increase reserves intensely. The reason for choosing objects in the energy and mining sector companies in this study is because in 2011 was a challenging year for the energy and mining sectors. Decline in commodity prices by 25% compared to the previous year. Acquisitions trends occur not only when commodity prices are distressed, but also in conditions of rising commodity prices. Abstract: The purpose of this study is to determine the difference in the acquirer's financial performance as measured by the current ratio of debt to equity ratio of the operating profit margin net profit margin return on investment return on equity between before and after the acquisition. The type of research used is comparative, the object of study used is energy and mining companies that conduct acquisitions listed on the Indonesia Stock Exchange between 2010-2015. The sampling technique used purposive sampling so that ten companies of energy and mining sector acquired the acquisition activity during the 2010-2015 period whose financial statements are listed in Indonesia Stock Exchange. Test results using Paired Sample t-Test show that four financial ratios do not experience significant differences, namely current ratio, operating profit margin, return on investment and return on equity and two ratios that are different, that is the ratio of debt to equity ratio, net profit margin.