| This study aims to examine the effect of mergers or acquisitions of public company stock prices listed in Indonesia Stock Exchange (IDX). In addition, this study will also examine the effect of a merger or acquisition to changes in the company's financial performance. The method used is the method of paired t-test. Stock prices and financial ratios of the company before the merger or acquisition will be compared with stock prices and financial ratios after the merger or acquisition. To analyze the financial performance of companies used financial ratio analysis, namely: debt ratio, total asset turnover, net profit margin, operating return on assets, return on equity, earning per share, price earnings ratio, dan market-to-book ratio. The object of this study were 18 companies listed on the Indonesia Stock Exchange and conduct mergers or acquisitions during the period 2004-2007. With the observation period of three years before and three years after mergers or acquisitions for the financial ratios, while for the stock price is 22 days before and 22 days after a merger or acquisition. The results of this study is that the merger or acquisition does not significantly affect the company's improving financial ratios. Company's financial ratios after the merger or acquisition does not show any difference. However, this study succeeded in proving that the merger or acquisition significantly affect the company's stock price improvement. Company's stock price around the announcement date of merger or acquisition proved to fluctuate. |