AN ANALYSIS OF SYNERGY EFFECT FROM ACQUISITION IN PT HAKAASTON AND ITS SUBSIDIARIES

Background – PT. Hakaaston has acquired three subsidiaries, namely PT. Bhirawa Steel, PT. Semen Indogreen Sentosa and PT. Catur Armindo Putra, which began in 2019. The acquisitions are generally expected to bring benefits to the acquiring company. However, after three years of implementing the acquisition, there has been no significant change, raising the question of whether the conducted acquisition that had been carried out was based on the right strategy and careful considerations. Aim – This study aims to obtain the evidence regarding the effects of the acquisition conducted by PT. Hakaaston. Design / Methodology / Approach – Researchers conducted an in-depth analysis of the condition using a mixed method approach to determine whether the acquisition that has been carried out could lead to financial synergies or operational synergies. The research process divided into several steps, the first step involved quantitative research, where the researcher conducted the statistical tests on the ratio of the company's financial reports of 2019-2022 which continued into the next step which involved qualitative in the form of in-depth analysis through interviews with informants. The results of statistical tests and interviews are integrated to allow the researcher to conclude whether synergy has been achieved from the acquisition.


INTRODUCTION
implementation. This leads investors, as shareholders, to demand high return as a sense of security against the high risks of M&A (Sheikh et al., 2015). In addition to the high risks, the cultural and regional differences between the acquiring company and the target company can pose challenges in M&A when the differences are substantial. Wang et al. (2020)  PT. Hakaaston is a subsidiary of PT. However, if this does not happen, the M&A strategy may not be executed effectively (Hossain, 2021). The selection of the right partner or target will lead to a productive M&A, benefiting not only the company but also the management and shareholders.
Productive M&A leads to increased shareholder wealth compared to operating separately (Natocheeva et al., 2017, Smeulders et al., 2019. Refe rring to previous research, the acquisition targets for PT.
Hakaaston should ideally be companies with good productivity and financial performance. This raises the question for researchers whether the acquisition conducted by PT.
Hakaaston is the right decision and can generate synergy beyond the individual conditions of each subsidiary company.

Synergy from Merger & Acquisition
The growth of a business or company can be seen through its asset value and financial performance. Das & Kapil (2012) (Cho, 1998

Financial Performance
Jumingan (2006) explains that financial performance is a reflection of the financial condition of a company during a specific period. This includes aspects such as revenue and expenses. According to Munawir (2012), financial performance aims to assess a company's level of liquidity, solvency, profitability, and activity, allowing for accurate measurement of the company's financial condition over time. Barnes (1987) states that financial ratios can be used for various purposes, including assessing a company's ability to pay its debts, evaluating business and managerial success, and even compliance with regulations regarding company performance . Pratiwi et al. (2020) in their research on financial performance and stock prices found that there is no

Methodology
The research method used in this study is a mixed methods approach. Creswell et al.

Data
The data in this study is divided into two types: primary data and secondary data.

Quantitative Analysis
Based in Further investigation will be conducted in the qualitative analysis section to determine the motives behind the acquisition and whether synergy has been achieved.

Qualitative Analysis
The added value for the company is the objective of M&A, which is achieved through market integration, risk diversification, and strategic management between subsidiary and holding companies through appropriate strategies (Gupta et al., 2021;Hossain, 2021 (Purnomo, 2023).
"During the acquisition process, the calculation of cash returns was not taken into account, so for corporate actions funded by interest-bearing debt, it will result in a mismatch. The impact of COVID-19 is compounded by the loss in exchange rates on imported materials required by subsidiary companies in conducting their business, which can affect both standalone and consolidated performance." (Ninang, 2023) Despite the financial performance decline of PT. Hakaaston, the company has gained positive impacts from the acquisition through its production operations.
"After the acquisition, there was a decrease in cost of goods sold, particularly in the readymix portfolio. Prior to the acquisition, the large demand for readymix was fulfilled through multiple vendors at varying prices. However, after the acquisition, the readymix demand is supplied by the subsidiary with guaranteed pricing and quality." (Dewantoro, 2023) "The production costs decreased as the production volume increased." (Yesaya, 2023) "After the acquisition, there was cost reduction due to the high demand for concrete production volume to supply both internal and external projects." (Aziz, 2023) The "Financial synergy is reflected in the balance sheet of the holding company through the growth of assets and equity, while for the subsidiary companies, their performance is manifested through increased revenue that contributes to net profit." (Dewantoro, 2023) "It has been achieved by improving the ability to negotiate interest rates with banks. The company's profit contribution to the holding company." (Parjanto, 2023) "Financial synergy has been adequately achieved, as the acquisition has led to the application of interest rates by bank creditors that align with those imposed on the holding company, compared to before the acquisition. Additionally, with the support of accelerated billing from the holding company, it has reduced interest expenses on bank loans." (Aziz, 2023) "Financial synergy is reflected in the balance sheet of the holding company through the growth of assets and equity, while for the subsidiary companies, their performance is manifested through increased revenue that contributes to net profit." (Zubair, 2023) "Not yet achieved." (Suandi, 2023) "Not yet achieved." (Wahdi, 2023)   "In terms of operating synergy resulting from the merger and acquisition, there has been a cost reduction in the acquisition of infrastructure projects. This is due to the direct allocation of infrastructure projects acquired by the holding company to its subsidiary companies." (Suandi, 2023) "The implementation of operating synergy has begun, leading to cost reduction, such as cost optimization in the acquisition of Hutama Karya Group projects." (Handayani, 2023) "  (Aryadi, 2023) "Before the acquisition, the procurement of ready mix and iron, which had high demand, was done through multiple vendors at varying prices. However, after the acquisition, the ready mix and iron needs are supplied by the subsidiary company, ensuring price and quality." (Rintoro, 2023) The theory of efficiency, particularly in terms of operational synergy, is supported in this study and manifests in cost reduction. The decrease in production costs, as a form of operational synergy, is a result of the high demand for concrete production volume to supply both internal and external market projects.