IMPACT OF MERGERS AND FINANCIAL PERFORMANCE ON COMPANY VALUE: PT IOH CASE

Abstract

This study aims to analyze the impact of the merger between PT Indosat Tbk and PT Hutchison 3 Indonesia, which formed a new entity named PT Indosat Ooredoo Hutchison (IOH), on the company's value, as well as to evaluate the influence of financial performance measured through liquidity, solvency, and profitability ratios during the 2021–2024 period. This study uses a descriptive quantitative approach by utilizing secondary data obtained from the companies' annual financial statements and official reports. The research results show that the merger between the two companies has a positive impact on the capital structure and competitive position of PT IOH. The solvency ratio (DER) shows a declining trend from 515% in 2021 to 212% in 2024, indicating improved financial stability and reduced reliance on debt financing. Meanwhile, the liquidity ratio remains below the ideal standard, indicating that the ability to meet short-term obligations still needs improvement. In terms of profitability, the ROA and ROE ratios decreased after the merger, suggesting a decline in operational efficiency in the initial post-integration phase. Overall, the analysis results indicate that mergers have a positive impact on company value in the long term, although the benefits have not been fully realized in the early post-merger period. Companies need to strengthen integration strategies and operational efficiency to optimize the increase in company value in the future.