The Impact of Divestment and Acquisition on Company Performance
DOI:
https://doi.org/10.55927/ijba.v6i3.16719Keywords:
Firm Performance, Portfolio Restructuring Divestment, Acquisition, Business GroupAbstract
Most companies in Indonesia restructured their portfolios in 1997 during the economic crisis, but the results were mixed after restructuring their portfolios. After the economic crisis, portfolio restructuring in the form of divestments and acquisitions in Indonesia continues with mixed results, as well as the results of divestment research and acquisitions are still diverse and not conclusive. In developing countries, especially in Indonesia, there have not been many research results on divestment and acquisition with moderated company size. The study examined the effect of divestment, acquisition and company size as moderation variables on a company's performance. A total of 54 issuers are listed in the IDX 2011 - 2019 which conducts divestments and acquisitions. The study used multiple regression analysis and moderation regression analysis (MRA) which that explains the relationship 2 independent variables. Divestment and acquisitions on the research proven to have an impact on firm performance and firm size as a moderating variable proved to be able to moderate the impact of the divestment of the firm performance but not proven to be able to moderate the impact of acquisitions on firm performance Expected results of this research are beneficial to the development of the theory of portfolio restructuring, beneficial for executives, managers, business analysts, and investors to determine the priority of the type of restructuring the portfolio to improve the performance of the company
Downloads
References
As’ari, Hasim., Pabulo, Azfa Mutiara Ahmad., Badus Zaman, Badrus. (2019)., Pengaruh Restrukturisasi Perusahaan Terhadap Kinerja Perusahaan. Jurnal Akuntansi & Ekonomi FE. UN PGRI Kediri. Vol. 4 No. 3
Bergh, Donald D. (1998). Product-Market Uncertainty, Portfolio Restructuring, and Performance: An Information-processing and Resource-Based View. Journal of Management, Vol. 24, No. 2, 135-155
Bowman, E. H., Signh, H., Useem, M., Bhadury, R. (1999), When Does Restructuring Improve Economic Performance?California Management, Vol.41 (2) pp: 33-54.
Chang, S.J., and Choi, U. (1988). Strategy, structure and performance of Korean business groups: atransactions cost approach, Journal of Industrial Economics, Vol. 37 (2) pp: 141-158.
Choi, Yoon K &Seung Hun Han, (2013), Corporate restructuring, financial deregulation, and firm value:Evidence from Japanese “spin-ins”. Pacific-Basin Finance Journal, Vol. 22 (1) pp: 1-13.
Dang, Chongyu., Li, Zhichuan (Frank)., Yang, Chen. (2018).,Measuring firm size
in empirical corporate finance, Journal of Banking & Finance, Volume
, , Pages 159-176
Datta, S., Iskandar-Datta, M., & Raman, K. (2003), Value Creation in Corporate Asset Sales: The Role of Managerial Performance and Lender Monitoring. Journal of Banking and Finance, Vol. 27 (2) pp: 351-375.
David, Fred R & David, Forest R. (2017) Strategic Management: A Competitive Advantage Approach, Concepts, 16th Edition. Harlow: Pearson Education
Denis, Diane K., & Rodgers, Kimberly J. (2007). Chapter 11: Duration, Outcome, and Post-Reorganization Performance, Journal of Financial and Quantitative Analysis, Vol.42 (1) pp: 101–118.
Dittmar, A. & Shivdasani, A. (2003), Divestitures and Divisional Investment Policies. The Journal of Finance, Vol. 58 (6) pp: 2711-2743
Edi & Cen, Su. (2016). Analisis Akuisisi Terhadap Kinerja Keuangan Perusahaan
Pengakuisisi Dan Diakuisisi Terdaftar Di Bursa Efek Indonesia. Jurnal
Benefita 1(3)
Gaur, Jighyasu & Gupta, Ritu (2011)., Comparing firm performance on the
basis of age, size, leverage, and group affiliation in Indian IT industry.
Romanian Journal of Marketing, Vol. 6 Issue 3
Xavier Gimbert, Xavier., Bisbe, Josep., & Mendoza, Xavier. (2010). The Role of
Performance Measurement Systems in Strategy Formulation Processes.
Long Range Planning 43. 477- 497
Gupta, P. K. (2012). Mergers and Acquisitions (M&A): the Strategic Concepts for
the Nuptials of Corporate Sector. Innovative Journal of Business and
Management, 1(4), 60–68.
Hanson, R. C. & Song, M. H. (2003), Long-term Performance of Divesting Firms and the Effect of Managerial Ownership. Journal of Economics and Finance, Vol. 27(3) pp: 321-336
Hawawini, Gabriel., Subramanian., Venkat & Verdin, Paul. (2003). Is Performance Driven By Industry – Or Firms-Specific Faktor? A New Look At The Evidence. Strategic Management Journal. 24: 1–16
Hult, G Tomas M., Jr, David J Ketchen., Griffith, David A., Chabowski, Brian R., Hamman, Mary K., Dykes, Bernadine Johnson., Pollite, Wesley A & Cavugil, S Tamer. (2008). An assessment of the measurement of performance in international business research. Journal of International Business Studies, 39, 1064–1080
Ismail, T. H., Abdou, A. A. & Annis, R. M. (2011), “Exploring Improvements of Post-Merger Corporate Performance- the Case of Egypt”, The IUP Journal of Business Strategy, Vol. VIII, No. 1.
Jasmine, Ulfa. (2017). Pengaruh Leverage, Kepemilikan Institusional, Ukuran Persuahaan, Dan Profitabilitaa Terhadap Penghindaran Pajak. JOM Fekon. Vol.4 No.1
Lakstutiene, A., Stankeviciene, J., Norvaisienec, R., and Narbutiene, J. (2015), “The Impact of Acquisitions on Corporate Performance Results during the Period of Economic Slowdown: Case of Lithuania”, Procedia - Social and Behavioral Sciences, Vol. 213 No.2015, pp.455 – 460.
La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer. (1999). Corporate ownership around the world, Journal of Finance. Vol. 54 (2) pp: 471-517.
Liargova, Panagiotis & Repousis, Spyridon. (2011) The Impact of Mergers and
Acquisitions on the Performance of the Greek Banking Sector: An Event
Study Approach. International Journal of Economics and Finance. Vol. 3,
No. 2
Malik, Muhammad Faizan., Anuar, Melati Ahmad., Khan, Shehzad., Khan, Faisal. (2014). Mergers and Acquisitions: A Conceptual Review. International Journal of Accounting and Financial Reporting, Vol. 4, No. 2
Mittra, James. (2007). Life Science Innovation and the Restructuring of the Pharmaceutical Industry: Merger, Acquisition and Strategic Alliance Behaviour of Large Firms. Technology Analysis & Strategic Management, Vol. 19, No. 3, 279–301
Moeller, S.B., Schlingemann, F.P. and Stulz, R.M., 2005. Wealth destruction on a
massive scale? A study of acquiring‐firm returns in the recent merger
wave. The Journal of Finance, 60(2), 757-782.
Montgomery, Cynthia A and Wernerfelt, Birger. (1988), Diversification, Ricardian rents, and Tobin's q. RAND Journal of Economics, Vol. 19 (4) pp: 623-632.
Mulherin, J. H. & Boone, A. L. (2000), Comparing Acquisitions and Divestitures. Journal of Corporate Finance, Vol. 6 (2) pp: 117-139.
Neethu, T & Viswanathan, R. (2015). A Study on Financial Performance of
Companies Before and After Merger and Acquisition. Indian Journal of
Research, 4(3), 6–8.
Oghuvwu, M. E & Omoye, A.S. (2016). Mergers, Acquisitions and Corporate Performance: The Balanced Scorecard Approach, Accounting and Finance Research,Vol. 5 (4) pp: 63-75.
Olokoyo, Felicia Omowunmi. (2013). Capital Structure and Corporate
Performance of Nigerian Quoted Firms: A Panel Data Approach. African
Development Review, Vol. 25, No. 3, 358–369
Omoye, A. S., & Aniefor, S. J. (2016). Mergers and Acquisitions: The Trend in
Business Environment in Nigeria. Accounting and Finance Research, 5(2),
–19.
Pertiwi, Rahayu Amalia., Hasnawati., Herawati, Vinola. (2018). Pengaruh Strategi Organisasi, Investasi Aset Tetap, Dan Kinerja Perusahaan Terhadap Kualitas Laba Dengan Ukuran Perusahaan Sebagai Variabel Moderasi (Studi Empiris Manufaktur Yang Terdaftar Di BEI). Jurnal Magister Akuntansi Trisakti, Vol. 5 No. 1
Rosenfeld, J. D. (1984) “Additional Evidence on the Relation Between Divestiture Announcements and Shareholder Wealth.” Journal of Finance, Vol. 39 (5) pp: 1437- 1447
Syukur, Muhammad & Fitri, Fauziah A., (2016). The impact of acquisition on acquirer companies’ financial performance. Issues in Business Management and Economics. Vol.4 (8), pp. 96-99
Tao, F., Liu, X., Gao, L. & Xia, E. (2017), “Do Cross-border Mergers and Acquisitions increase short term market Performance? The case of Chinese firms”, International Business Review, Vol.26 No.1, pp.189-202
Taouab, O., & Issor, Z. (2019). Firm Performance: Definition and Measurement Models. European Scientific Journal ESJ, 15(1), 93–106.
Tuch, Christian & O'Sullivan, Noel. (2007). The Impact of Acquisitions on Firm
Performance: A Review of the Evidence, International Journal of
Management Reviews 9 (2):141 - 170
Veld & Veld-Merkoulova, (2004), Do spin-offs really create value? The European case. Journal of Banking & Finance, Vol. 28 (5) pp: 1111–1135
Wakesa, Martin Mabonga & Yabesh, Kongo. (2020). Portfolio Restructuring as a
Precursor for Financial Performance of Commercial Banks Listed at
Nairobi Securities Exchange. IOSR Journal of Economics and Finance
(IOSR-JEF). volume 11, Issue 2. PP 01-07
Wardani, Deni & Rudolfus, Maria Yeschrina. (2016).” Dampak Leverage,
Kepemilikan Institusional dan Ukuran Perusahaan Terhadap Kinerja
Perusahaan Pada Perusahaan Manufaktur Periode 2011-2015. Jurnal
Keuangan dan Perbankan, Vol. 13, No. 1, h. 1-16.
Woo, Carolyn Y., Willard, Gary E., Daellenbach, Urs. S. Spin-off performance: A
case of overstated expectations? Strategic Management Journal. Vol. 13, No.
, pp. 433-447
Yeh, T., & Hoshino, Y. (2002), Productivity and Operating Performance of
Japanese Merging Firms: Keiretsu- related and Independent Acquisitions.
Japanese and the World Economy, Vol. 14 (3) pp: 243-366.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Depince Pigai, Hasim As'ari
This work is licensed under a Creative Commons Attribution 4.0 International License.
