Comparative Analysis of PT Astra International Tbk's Financial Performance Before and After the Acquisition of PT Astra Aviva Life (2019–2023)

Abstract

This study looks at how the financial performance of PT Astra International Tbk changed before and after it bought PT Astra Aviva Life between 2019 and 2023. The acquisition was finished in November 2020 and was a key move to improve Astra’s financial services part, especially in life insurance. Astra increased its ownership to 99.99% to better control the business. The goal was to make the different parts of Astra work better together, save costs, and make more profit. But the process also brought challenges like the costs of combining the two companies and reorganizing their finances. The study checks if the acquisition helped Astra’s finances get better overall. The research uses a quantitative method, looking at financial data from Astra’s annual reports that are published on the Indonesia Stock Exchange.It looks at several financial indicators such as profitability (Net Profit Margin and Gross Profit Margin), liquidity (Current Ratio and Cash Ratio), activity (Total Asset Turnover and Fixed Asset Turnover), and solvency (Debt to Asset Ratio and Debt to Equity Ratio). Data from before the acquisition (2019–2020) and after (2021–2023) is compared to see if the acquisition led to better financial results. The results show that Astra’s financial performance improved after the acquisition. Profitability measures like Net Profit Margin (NPM) and Gross Profit Margin (GPM) went up, showing better cost control and successful teamwork between Astra and Astra Life. Efficiency ratios such as Total Asset Turnover (TATO) and Fixed Asset Turnover (FATO) also increased, meaning Astra used its assets more effectively and worked more productively. These improvements support theories that well-run acquisitions add value through better management and operations. Liquidity ratios stayed stable, showing Astra could still meet its short-term costs even after the acquisition. Solvency ratios also improved, with the Debt to Equity Ratio (DER) going from 0.73 in 2020 to 0.69 in 2022. This shows Astra had a stronger financial structure and lower risk. These results show Astra managed its debt carefully while still growing its profits. Overall, the acquisition had a positive and lasting effect on Astra’s financial performance. Even though there were some ups and downs during the integration period, Astra managed to balance growth with financial stability. The recovery of profitability, efficiency, and solvency after the acquisition shows that Astra used strong management and integration strategies to improve its competitiveness and long-term success. From an academic point of view, this study adds to the existing evidence that supports Synergy Theory and Differential Efficiency Theory. It shows that when companies do acquisitions in a smart and planned way, they can improve their performance in emerging markets. In real-world terms, the results show that successful post-merger integration, good management of money, and achieving operational synergies are key to keeping a company financially stable. But this research only looks at financial ratios and doesn’t take into account non-financial factors like culture or how well organizations work together. Future research should look at these areas to better understand how acquisitions affect company value in Indonesia.