The long-term performance of post-merger and acquisition: evidence from Indonesias stock market

This study evaluates the long-term share performance of firms over
three years after they underwent merger and acquisition (M&A). This is
happening since researchers failed to find answers in the short-term analysis
and began looking for answers through long-term analysis. Most previous
studies have been done either in big capital markets (US and the UK) or smaller
capital markets such as Greece and Malaysia but not Indonesia. The share
performance was measured through cumulative market adjusted abnormal
return (CMAR) and buy and hold abnormal return (BHAR). The result of this
study provides evidence of the presence of negative abnormal returns of the
merged and acquiring firms. Moreover, the results show that cash payments are
preferable in comparison to the share settlement. The results also reveal that the
firms which are owned by families tend to outperform the firms which are not
owned by families