| Summary: | This study is a case study that evaluated the strategy decisions of merger and
acquisition which is made by PT BAT Indonesia Tbk. (BATI) on PT Bentoel
International Investama (RMBA). In this study there is evaluated the success of
mergers and acquisitions which are divided into four phases: (i) the evaluation of a
company's equity value to understand the intrinsic value as the fair price of the stock
of RMBA during acquisition, (ii) the evaluation of market reaction to understand the
impact of the acquisition of the equity in the capital markets, (iii) the evaluation of
financial performance using the balance sheet, income statement, and financial ratios,
and (iv) the evaluation of added value which is based on the Market Value Added
(MVA) and Economic Value Added (EVA).
Based on the results of the evaluations, there are shown that the equity value of
RMBA using the method of dividend discounted model is obtained by the intrinsic
value of Rp 1055, - as the fair price of the stock at the time of acquisition on RMBA,
so that the decision making of the purchase transaction valued at USD 873, - is
acceptable. In the evaluation of the market reaction during the two years after the
mergers and acquisitions, the average stock price in the market is below the
acquisition price of Rp 873, -. This shows the difference in perception between
market traders and corporate management in the view of mergers and acquisitions.
The third evaluation is the evaluation of financial performance which is obtained by
comparisons of financial ratios before and after the merger. In the comparison of the
financial ratios, there are several ratios improved in the period after the merger such
as asset management ratios, debt ratios, and market ratios, but the liquidity ratio and
profitability ratio have decreased. In the evaluation of added value based on Market
Value Added (MVA) and Economic Value Added (EVA), the value of MVA and
EVA constantly increased from the period before the merger in 2007 and 2008 to the
period after the merger of 2009 and 2010.
|
|---|