Consequence of Merger Plan Announcement (Study on Stock Price of State-Owned Islamic Banks)

H Suhendri ,Agung Handayanto ,Ibrahim Hayani

doi:10.7176/rjfa/12-22-08

Abstract

The Covid-19 pandemic has caused the economies of all countries in world to decline sharply. One of sectors affected is the banking industry. The national banking in Indonesia is also affected. The business strategy to make a company can survive in crisis is merger. This study aims to examine changes in stock price of BRI Syariah banks before and at the announcement of planned merger of a State-owned Islamic Banks (SOIB). The samples are daily stock price at closing price within a span of three months before and three months at time of merger plan announcement. The samples are selected by purposive sampling. Based on existing criteria, BRI Syariah was selected as the sample in this study. The data analysis technique used was a parametric test, namely paired sample t-test to test existing hypotheses. The research results show a significant difference or change in stock price of BRI Syariah banks before and at merger plan announcement of SOIB. This is indicated by the t significance value of 0.020 smaller than 0.05. Thus it can be interpreted that there is a difference in stock price of BRI Syariah Bank before and merger plan announcement of SOIB. Keywords: Merger, SOIB, Stock Price DOI: 10.7176/RJFA/12-22-08 Publication date: November 30th 2021

Highlights

The spread of COVID-19 virus has implications for a decrease in global economic activity, including in Indonesia
The data used are from the 3 months before and 3 months at time of merger plan announcement of State-owned Islamic Bank (SOIB)
If we look at table 1, there is an increase in stock prices at time of merger plan announcement of SOIB

Summary

Introduction

The spread of COVID-19 virus has implications for a decrease in global economic activity, including in Indonesia. The banking or financial services is a business sector in Indonesia that has been affected by the COVID-19 pandemic. One way to maintain the bank financial performance is merger. Merger is a joint of two or more companies into a bigger and stronger company. We need a voluntary attitude from the joint companies that. These mergers often creates 'companies with new names' (Anderibom, Samuila., Obute, 2015). It should be noted that merger had a negative impact, including the resignation of several employees due to inconvenience to business orientation, accounting systems and corporate cultures differences (Silalahi & Ginting, 2020)

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