Regulatory Advisory On Mergers & Acquisitions In Indonesia

Foreign investors lead most Mergers & Acquisitions (M&A) deals in Indonesia. It is important to note that foreign investments in Indonesia are to be conducted in the form of a PT Penanaman Modal Asing ( commonly known as a PT PMA) – the equivalent of a Limited Liability Company in Indonesia.

Foreign companies or investors should be aware of the recent changes in Indonesia’s Positive Investment List. This list determines the business lines that are open to foreign investments and, more importantly, the maximum percentage of foreign shareholding.

NoIndonesia laws and regulations on M&A include:
1Law No 40 of 2007 on Limited Liability Companies (Company Law)
2Law No 25 of 2007 on Investment
3Law No 5 of 1999 on Prohibition of Monopoly and Unfair Business Competition
4Law No. 13 of 2003 on Manpower.
5Law No 8 of 1995 on the Capital Markets (Capital Markets Law)
6Government Regulation 27 of 1998 on Merger, Consolidation, and Acquisition of a Limited Liability Company
7Government Regulation 57 of 2010 on Mergers or Consolidations of Business Entities and Acquisitions of Company Shares Which May Result in Monopolistic Practices and/or Unfair Business Competition
8KPPU Law No 3 of 2019 on Assessment of Mergers or Consolidations or Acquisitions of Companies That May Result in the Occurrence of Monopolistic Practices and/or Unfair Business Competition
9OJK Regulation No. 9/POJK.04/2018 on Public Company Takeover
10OJK Regulation No. 74/POJK.04/2016 on Merger or Consolidation of a Public Company
tax audit service

A Guide to the Types Of Mergers & Acquisition Transactions

Based on Indonesian Company Law, here are the most preferred types of Mergers & Acquisitions transactions in which we can assist.

*M&A-related regulations vary between sectors and could either take precedence or complement existing general M&A laws and regulations.

Processing Mergers and Acquisitions Transactions

In general, the procedures of Mergers and Acquisitions in Indonesia are summarised as follows:

  • The acquirer and the target company prepare an M&A proposal for newspapers.
  • The target company conducts an extraordinary general meeting of shareholders with at least 75% of shareholders.
  • Creditors approve the proposed M&A transaction.
  • Determine the fair market value of the merger shares conversion formula through a valuation of shares.
  • Third parties (as required by law and agreements) give approval.
  • Relevant agencies (BKPM, OJK, and Ministry of Law and Human Rights) approve the merging or acquired companies.
  • Any relevant industry regulator gives approval (depending on the business nature of the target company)

The process of investigating the financial history and problems in the business is necessary for the company that will be acquired. A thorough investigation needs to be done by a potential investor, so it will not make a wrong move. Due diligence is also helpful for measuring the risk of the business that will be acquired.

A merger or an acquisition takes at least 30 days to be successfully completed from a regulatory perspective. However, it may take longer due to negotiations and diligence processes.

Filing The Mergers and Acquisitions Documents

*M&A-related regulations vary between sectors and could either take precedence or complement existing general M&A laws and regulations.

Your Turnkey Solution for Mergers & Acquisitions In Indonesia

InCorp’s merger and acquisition services in Indonesia are designed to help clients achieve their strategic goals. Our comprehensive services comprise the valuation, negotiation, and completion stages, including financial audit and legal due diligence.

To learn more about Indonesia’s M&A regulations and processes, fill in the form below, and our M&A consultant will be in touch with you shortly.

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Are you ready to make your
mark in Indonesia?

Get in touch with us.

Lead Form

What Our Clients Say

China Fortune Land
Development Co,. Ltd
After comparing several consultants, I found InCorp Indonesia is a international and professional organization with good understanding of local market. InCorp Indonesia helped our company to set up our first Indonesian entity, and also helps with day-to-day operation. InCorp Indonesia showed high level of professionalism. Jump start the business in Indonesia, take care of routine process, therefore we can focus more on our core business.
Desmi
Cekindo provided outstanding services in registering our representative office in Indonesia in a timely manner. Their financial services have been helping us a lot — our local employees feel secure working for our company. Cekindo became our reliable partner with quick response on our needs. Their flexibility and full support of our business in Indonesia are the main reasons to continue in our cooperation.
PT AESK
We chose Cekindo because we considered Cekindo as a professional company with a good attitude and a streamlined business model. Cekindo met all our expectations as it created the atmosphere of accountability and transparency. The most significant added values that we received from cooperation with Cekindo are the time we saved and mistakes we avoided.
Sedbergh, Ltd.
We were searching for suitable partner for the begining of our operation on Indonesian market. After short exploration and recommendation from our business partners we decided for Cekindo. Local knowledge, orientation at our business problematics, contacts and language. In a friendly approach combined with professional service. Consultation before the project – avoids so much unnecessary act of “foreigners” worse overview of the Indonesian legislative.
LEC GROUP
We were searching for suitable partner for the begining of our operation on Indonesian market. After short exploration and recommendation from our business partners we decided for Cekindo. Local knowledge, orientation at our business problematics, contacts and language. In a friendly approach combined with professional service. Consultation before the project – avoids so much unnecessary act of “foreigners” worse overview of the Indonesian legislative.
Our Clients Find This Helpful. Please Review.
Rating: 4.8/5. From 14 votes.
Please wait...