Financing Alternative Selection For Post-Acquisition Of Competitor (Study Case: PT Semen Indonesia Tbk Acquiring PT Holcim Indonesia Tbk)

Budiono, Adji Sepvian Fadillah (2021) Financing Alternative Selection For Post-Acquisition Of Competitor (Study Case: PT Semen Indonesia Tbk Acquiring PT Holcim Indonesia Tbk). Undergraduate thesis, Institut Teknologi Sepuluh Nopember.

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Abstract

PT Semen Indonesia (Persero) Tbk had decided a major investment back in 2018 to acquire one of its competitors, PT Holcim Indonesia, which is now renamed as PT Solusi Bangun Indonesia. The acquisition enables Semen Indonesia to increase its production capability, increase supply chain network efficiency, and bring the production plants closer to the major market in Java. Consequently, Semen Indonesia successfully increase its market share from 39.4% to 53.1% by 2019. However, the investment involves many financing burdens which has been worsen by COVID-19. The investment is evaluated by comparing the return on invested capital (ROIC) and weighted average cost of capital (WACC) and is deemed to have room for improvement as the WACC is higher than the ROIC. Hence, the research will determine a set of financing plan alternatives in a ranking from best to last in increasing the capital structure efficiency using Analytical Hierarchy Process. With the criteria considered follows Semen Indonesia’s main concern which are the effect on liquidity, effect on WACC, and the debt management level. The result shows the suggestion in order are supply chain financing, buyback 50% of SMGR01BCN2 bond, do not take any action, and lastly prepay the syndicated term loan maturing in 2025. Additionally, the result has been proven to be sensitive towards the portion of bond which made the buyback bond the least favourable if the portion exceeds 75%.

Item Type:	Thesis (Undergraduate)
Uncontrolled Keywords:	analytical hierarchy process, capital structure, finance.
Subjects:	H Social Sciences > HG Finance H Social Sciences > HG Finance > HG4529 Investment analysis T Technology > T Technology (General) > T57.84 Heuristic algorithms.
Divisions:	Faculty of Industrial Technology and Systems Engineering (INDSYS) > Industrial Engineering > 26201-(S1) Undergraduate Thesis
Depositing User:	Adji Sepvian Fadillah Budiono
Date Deposited:	04 Aug 2021 06:55
Last Modified:	04 Aug 2021 06:55
URI:	http://repository.its.ac.id/id/eprint/84812

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