Business Valuation of Islamic Banks in Merger Plan To Become An Indonesia’s State-Owned Islamic Bank
Abstract
Indonesia needs a sizeable Islamic bank to confront the ASEAN Economic Community (MEA) in 2020, so it can compete with existing Islamic banks in ASEAN. Then there was a plan to merge several Islamic banks into Government's Islamic banks. This study aims to analyze from the business valuation point of view about the Islamic bank's merger plan in Indonesia and to calculate the value of synergy if the bank merged. Company valuation used DCF-FCFE method and PBV. Islamic banks those were simulated merged are BSM, BRIS, and BNIS. Based on the study there is a synergy when the three banks merged. So, the merger plan of Islamic bank is feasible.
Keywords
References
Anggelopoulos, E. (2017). Understanding Bank Valuation: An Application of the Equity Cash Flow and the Residual Income Approach in Bank Financial Accounting. Open Journal of Accounting. Vol. 6: 1-10. doi: https://doi.org/10.4236/ojacct.2017.61001.
Anonimously. (2004). Getting Growth Right: How Due Diligence Aids Successful Mergers. Strategic Direction. Vol. 20(10): 11-14. doi: https://doi.org/10.1108/ 02580540410562107
Bernile, G., Lyandres, E., & Zhdanov, A. (2011). A Theory of Strategic Mergers. Review of Finance. Vol. 16: 517-575.
Cartwright, S., & Schoenberg, R. (2006). Thirty Years of Mergers and Acquisitions Re-search: Recent Advances and Future Opportunities. British Journal Management. Vol. 17(S1): S1-S5. doi: https://doi.org/10.1111/j.1467-8551.2006.00475.x.
Damodaran, A. (2012). Investment Valuation: Tools and Techniques for Determining the Value of Any Asset (3rd Ed). New Jersey: John Wiley & Sons, Inc.
Deev, O. (2011). Methods of Bank Valuation: Critical Review. Journal of Financial Assets and Investing. Vol. 3: 33-44.
Denison, D. R., & Ko, I. (2016). Cultural Due Diligence in Merger and Acquisition. Ad-vances in Merger and Acquisitions, Vol. 15: 53-72.
DePamphilis, D. (2011). Mergers and Acquisitions Basics: All You Need to Know. Oxford: Elsevier.
Franceschi, L. F. (2008). Valuations of Banks in Mergers. Academic Affiliation Catholic Univer-sity of Milan.
Gaughan, P. A. (2007). Merger, Acquisitions, and Corporate Restructurings’, 5th Edition. New Jer-sey : John Wiley and Sons, Inc.
Gitman, L. J. & Zutter, C. J. (2015). Principles of Managerial Finance (14th Ed). Boston: Pren-tice Hall.
Hitt, M. A., King, D. R., Krishnan, H., Makri, M., & Schijven, M. (2012). Creating Value through Mergers and Acquisitions: Challenges and Opportunities. In Faulkner, D., Teerikan-gas, S., & Joseph, R. J. (eds). The Handbook of Merger and Acquisitions. Oxford: Oxford University Press.
Hoberg, G., & Phillips, G. (2010). Product Market Synergies and Competition in Mergers and Acquisitions: A Text-Based Analysis. The Review of Financial Studies. Vol. 23 (10): 3773-3811. doi: https://doi.org/10.1093/rfs/hhq053.
Kandil, T., & Chowdury, D. (2014). Islamic Banks’ Mergers and Acquisitions – Impacts on Performance and Financial Crisis in the United Kingdom. Contemporary Studies in Eco-nomic and Financial Analysis. Vol. 95: 119-140.
Kartika, L., & Rofi, M. A. (2015). Simulasi Strategi Akuisisi Bank di Indonesia: Akuisisi Bank Mandiri Terhadap Bank Tabungan Pensiunan Nasional (The Strategy Simulation of Bank’s Acquisition in Indonesia: The Acquisition of Bank of Mandiri to Bank of Tabungan Pensiunan Nasional). Finance and Banking Journal. Vol. 17(2): 26-51.
Liu, J., Nissim, D., & Thomas, J. (2002). Equity Valuation Using Multiples. Journal of Ac-counting Research. Vol. 40(1): 135-172.
Lommerud, K. E., Olsen, T. E., & Straume, O. R. (2006). Cross Border Merger and Strate-gic Trade Policy with Two-Part Taxation: Is International Policy Coordination Bene-ficial?. WZB Discussion Paper, No. SP II 2006-24.
Mahmood, I., Aamir, M., Hussain, M., & Sohail, N. (2012). Impact of Merger/Acquisition on Share Price-a case Study of Pakistan. European Journal of Scientific Research. Vol. 67(4): 617-624.
Miftah, K., & Wibowo, H. (2017). Merger and Industrial Acceleration: Study at Indonesian Islamic Banking Industry. Signifikan: Jurnal Ilmu Ekonomi. Vol. 6 (1): 29-48. doi: https://doi.org/10.15408/sjie.v6i1.4728.
Ross, S. A., Westerfield, R. & Jaffe, J. F. (2012). Corporate Finance. New York: The McGraw-Hill Companies.
Shanmugam, B., & Nair, M. (2003). Mergers and Acquisition of Banks in Malaysia. Manage-rial Finance. Vol. 30(4): 1-18.
Tan, W. (2015). Pentingnya Due Diligence Sebelum Berinvestasi (The Importance of Due Diligence Be-fore Investing). Wake Up Call RSM AAJ Associates, accessed at www.rsm.global on June 19th, 2017.
DOI: 10.15408/etk.v17i2.7238
Refbacks
- There are currently no refbacks.
Copyright (c)
