Acquisitions Show No Immediate Financial Gains for Indonesia’s TMT Firms, Study Finds
Corporate acquisitions in Indonesia’s technology, media, and telecommunications (TMT) sector have not produced significant short-term improvements in financial performance, according to a 2026 study by Rahmadani Fitri and Richad Alamsyah of Institut Bisnis dan Informatika Kesatuan. Published in the International Journal of Advanced Technology and Social Sciences, the research analyzes financial data from publicly listed TMT companies on the Bursa Efek Indonesia between 2019 and 2022.
The findings challenge the common assumption that acquisitions automatically strengthen profitability, liquidity, or capital structure. For investors, corporate executives, and policymakers, the results offer a more cautious view of acquisition-driven growth strategies.
Why Acquisitions Matter in the Digital Economy
Over the past decade, mergers and acquisitions have become a key expansion strategy worldwide. Global M&A activity reached record highs in 2021, driven largely by digital transformation and consolidation in technology sectors. Indonesia’s TMT industry has followed this global trend, with companies pursuing acquisitions to expand market share, gain technological capabilities, and improve competitiveness.
In theory, acquisitions generate “synergy,” meaning the combined company should create more value than the two firms operating separately. Synergy can come from cost efficiencies, integrated technology systems, expanded distribution networks, or improved capital access.
However, real-world results often depend on execution. Integration challenges, financing structures, and macroeconomic disruptions can significantly influence post-acquisition performance. The COVID-19 pandemic, which overlapped with the study period, added further complexity to corporate performance in 2019–2022.
How the Study Was Conducted
Rahmadani Fitri and Richad Alamsyah analyzed 30 TMT companies listed on the Bursa Efek Indonesia that completed acquisition transactions during the study period. The researchers used publicly available annual financial statements to compare company performance before and after acquisitions.
The analysis focused on three major financial dimensions:
Profitability
-Return on Assets (ROA)
-Return on Equity (ROE)
-Net Profit Margin (NPM)
Liquidity
-Current Ratio (CR)
-Quick Ratio (QR)
-Cash Ratio
Capital Structure
-Debt to Asset Ratio (DAR)
-Debt to Equity Ratio (DER)
-Equity to Asset Ratio (EAR)
The researchers applied statistical comparison tests to determine whether differences between pre- and post-acquisition performance were significant.
Key Findings: No Significant Differences
The overall conclusion is clear: acquisitions did not produce statistically significant changes in financial performance during the observed period.
Profitability
-ROA and ROE showed a slight decline after acquisitions.
-Net Profit Margin increased modestly.
-None of these changes were statistically significant.
Liquidity
-Current Ratio, Quick Ratio, and Cash Ratio generally declined.
-Companies maintained stable short-term solvency.
-Differences before and after acquisition were not significant.
Capital Structure
-Debt-related ratios shifted slightly.
-Some firms relied more on equity financing after acquisitions.
-Again, no statistically significant difference was found.
These results indicate that, at least in the short term, acquisition strategies in Indonesia’s TMT sector did not substantially alter core financial performance indicators.
Integration and External Factors Play a Role
According to Rahmadani Fitri of Institut Bisnis dan Informatika Kesatuan, acquisition outcomes depend heavily on post-transaction integration and external economic conditions.
She and co-author Richad Alamsyah emphasize that financial improvements may take several years to materialize. During 2019–2022, companies faced pandemic-related disruptions, market volatility, and operational adjustments that may have limited short-term financial gains.
The authors note that without effective integration strategies, expected synergies may not translate into measurable financial improvements. Operational restructuring, cultural alignment, and risk management all influence post-acquisition performance.
Implications for Investors and Business Leaders
The findings offer important lessons for stakeholders:
For investors:
An acquisition announcement does not automatically signal immediate financial improvement. Investors should evaluate long-term integration strategies rather than relying solely on short-term performance metrics.
For corporate management:
Strategic focus must extend beyond deal completion. Effective integration planning, operational efficiency, and balanced financing decisions are critical to realizing value.
For policymakers and regulators:
Industry consolidation does not guarantee improved corporate stability or profitability. Regulatory frameworks should consider long-term industry health rather than assuming short-term gains from mergers.
The study also suggests that performance measurement should incorporate broader indicators, such as revenue growth, innovation output, and operational efficiency, not just accounting ratios.
The Broader Research Context
Globally, academic literature shows mixed results regarding acquisition performance. Some studies report positive long-term gains, while others find neutral or negative short-term impacts. The research by Rahmadani Fitri and Richad Alamsyah adds evidence from Indonesia’s rapidly evolving digital economy, contributing region-specific insight to the global M&A debate.
By focusing specifically on the TMT sector, the study addresses one of the most dynamic industries in Southeast Asia. As digital transformation continues to accelerate, acquisition strategies will likely remain central to corporate growth plans.
Author Profiles
Rahmadani Fitri, S.E., M.Ak. is a lecturer in Accounting at Institut Bisnis dan Informatika Kesatuan. Her research focuses on financial statement analysis, corporate finance, and strategic financial management.
Richad Alamsyah, S.E., M.Ak. is also a lecturer in Accounting at Institut Bisnis dan Informatika Kesatuan. His expertise includes financial performance evaluation, capital structure analysis, and corporate investment policy.
Both authors are affiliated with Institut Bisnis dan Informatika Kesatuan in Bogor, Indonesia, and contribute to research on financial management and corporate strategy in emerging markets.
Source
Fitri, R., & Alamsyah, R. (2026). Comparative Analysis of Profitability, Liquidity and Capital Structure Before and After Acquisition. International Journal of Advanced Technology and Social Sciences, Vol. 4, No. 2, pp. 175–182.
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