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Background In emerging markets, acquisitions are increasingly used by firms as a faster way to expand, strengthen competitiveness, and gain strategic control. Despite this growing trend, previous studies still show mixed evidence on whether acquisitions actually improve firm valuation beyond the announcement period. Most existing research mainly focuses on short-term market reactions and general ownership categories, while ownership structures associated with stronger legal and managerial control have received less attention. Therefore, this study examines how strategic acquisitions affect firm valuation using EV/EBITDA as the main valuation measure and also investigates whether corporate governance moderates this relationship. Methods This study uses publicly listed companies on the Indonesia Stock Exchange (IDX), particularly firms that completed acquisitions resulting in ownership control of at least 66.67%. This threshold refers to the qualified majority provision regulated under Indonesian Company Law (Law No. 40 of 2007). The analysis applies panel data regression using the Fixed Effects model, along with year fixed effects and clustered standard errors. Changes in firm valuation are observed from the acquisition year (post0) up to the third year after the transaction (post3). After the sample selection process, the final dataset consists of 26 firms with 459 firm-year observations. Results The findings show that strategic acquisitions are not followed by immediate improvements in firm valuation, especially in the short term. In the first year after the acquisition (post1), EV/EBITDA shows a negative and statistically significant coefficient, indicating that firms may still be dealing with integration-related pressures such as restructuring costs, operational adjustments, and post-merger realignment. Meanwhile, the other post-acquisition periods do not show a statistically significant effect on firm valuation. The results also suggest that corporate governance does not significantly moderate the relationship between strategic acquisitions and firm valuation during the observed period. Conclusions Overall, value creation after an acquisition tends to take time rather than occur immediately. The success of an acquisition depends largely on how effectively the firm manages the integration process, maintains operational performance, and executes its long-term strategic objectives. As a result, the expected synergies and benefits from acquisitions are more likely to emerge gradually over time.
Gloria et al. (Mon,) studied this question.