A STUDY ON IMPACT OF MANAGERIAL ABILITY ON MERGER AND ACQUISITION PERFORMANCE

The purpose of this study is to explore the correlation between managerial ability and the performance of mergers and acquisitions (M&A). The research examines the impact of managerial ability on both short-term and long-term performance of the acquiring firm. The period of study is from 2016 to 2021, using two metrics which are Market-to-Book Ratio (MTBR) to assess operating performance and Buy-and-Hold Abnormal return (BHAR) to quantify stock return performance. By analyzing data from a sample of M&A cases conducted by public companies registered within KPPU in Indonesia, this study aims to establish whether a positive correlation exists between managerial ability and M&A success. The research concludes that successful M&As depend on effective decision-making by managers, who play a critical role in navigating the complexities of integration and value creation. The findings can contribute to the understanding of factors that influence M&A outcomes and potentially improve investment decisions by emphasizing the importance of managerial competence in such endeavors.