Abstract
Purpose: This study was conducted to examine the impact of the operating synergy, financial synergy and firm reputation toward firm performance in merger and acquisition processes. This study also examines how firm reputation moderates the impact of operating synergy and financial synergy toward firm performance. The object of this research are companies involved in mergers and acquisitions between 2010 and 2016. Design/methodology/approach: The purposive sampling method is used to select the research sample. The descriptive statistical test, outlier test and hypothesis test is used to analyze the data using e-eviews program. The study assumed Buy and Hold Abnormal Return (BHAR) as the performance to measure a successful acquisition, and the factors that have an impact on acquisition performance are taken as being operating synergy, financial synergy and firm reputation. Findings: The results of this study show that by maximizing the operating synergy and firm reputation, this can improve the BHAR of an acquisition event, and a firm will a weak reputation can strengthen the BHAR by maximizing the operating synergy. Practical implications: These findings will be very helpful to management to maximize their firm performance using merger and acquisition as their strategy and firm reputation as their intangible resources. Originality/value: This article provides a new insight of acquisition research as to how firm reputation moderates the impact of acquisition synergy to achieve firm performance. DOI: 10.32602/jafas.2020.002
Highlights
Mergers and acquisitions are an important tool or strategy for survival used by many companies in today's competitive business environment
This research has broadly answered several questions relating to problems that occur in the acquisition and merger research, and how the purpose of the acquisition can have an impact on company performance
Mergers and acquisitions can be a strategy for achieving sustainable competitive advantage, but these benefits depend on orders and access to effective utilization of organizational resources and knowledge expressed in resource based theory
Summary
Mergers and acquisitions are an important tool or strategy for survival used by many companies in today's competitive business environment. Consumers who like acquirers with a good reputation are seen to continue to choose products from the target company This is because they believe the acquirer will transfer competencies and assets (Haleblian et al, 2017). Operating synergy aims to gain profits through a combination of the acquirer company with the resources of the acquired company, such as revenue growth through new product offerings or cost savings due to changes in economies of scale.
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