Conducting corporate merger and acquisition is a faster and more favorable strategy for firm to survive and grow. This research aims to examine the impact of merger and acquisition on financial performance of the firms measured by financial ratios in order to find significant differences before and after merger and acquisition.
The sample of this research consists of 11 acquirer firms taken by purposive sampling method. The data of financial ratios are mainly obtained from the Indonesian Capital Market Directory (ICMD) from year 2003 to 2013. The method used to answer the hypotheses is Paired T Test, the synergy is then measured by examining some pre- and post-merger and acquisition financial ratios (5 years before and 5 years after). The result shows that all financial ratios are not significatly different before and after merger and acquisition, thus merger and acquisition have not yet brought significant impact on the financial performance of the firms.
Key words: Mergers and Acquisition, Financial Performance, Financial Ratios, Paired t test, Synergy