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Mergers & Acquisitions Indonesia

Merger & Acquisition (M&A) In Indonesia

The landscape for foreign investment in Indonesia continues to improve as the Indonesian government works towards relaxing foreign investment regulations and improving ease of doing business in Indonesia. And these recent regulatory changes have a knock-on effect on Indonesia’s Merger & Acquisition landscape.
Read on to find out how we can navigate you through your M&A in Indonesia.

Regulatory Advisory On M&A In Indonesia

As the majority of Merger & Acquisition (M&A) deals in Indonesia are led by foreign investors. It is important to note, foreign investments in Indonesia are to be conducted in a form of a PT PMA – commonly referred to as a PT Penanaman Modal Asing, the equivalent of a Limited Liability Company in Indonesia.

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

Other noteworthy Indonesia laws and regulations on M&A include:

  1. Law No 40 of 2007 on Limited Liability Companies (Company Law)
  2. Law No 25 of 2007 on Investment
  3. Law No 5 of 1999 on Prohibition of Monopoly and Unfair Business Competition
  4. Law No. 13 of 2003 on Manpower.
  5. Law No 8 of 1995 on the Capital Markets (Capital Markets Law)
  6. Government Regulation 27 of 1998 on Merger, Consolidation, and Acquisition of a Limited Liability Company
  7. OJK Regulation No. 9/POJK.04/2018 on Public Company Takeover
  8. OJK Regulation No. 74/POJK.04/2016 on Merger or Consolidation of a Public Company

Guidance On Types Of M&A Transactions

Based on Indonesia’s Company Law, here are the most preferred types of M&A transactions we can assist with.

Merger In Indonesia

All assets and liabilities are legally transferred to the acquired entity. The remaining firms are legally liquidated.

Consolidation In Indonesia

All entities are legally liquidated, all assets and liabilities are legally transferred to a newly formed entity

Share or Asset Acquisition In Indonesia

A legal entity acquires shares of assets in a company resulting in a change of control in the acquired entity. There are strict proceeds under the Indonesian Company Law such as Public acquisition announcement, Sale and purchase agreement, and Deed of transfer, to name a few.

*At this point, it is important to note, M&A-related regulations vary between sectors and could either take precedence or complement existing general M&A laws and regulations. 

Processing M&A Transactions

In general, the procedures of M&As in Indonesia are summarised as follows:

– The acquirer and the target company prepares an M&A proposal in newspapers.
– The target company conducts an extraordinary general meeting of shareholders with the presence of at least 75% 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)

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


Filing M&A Documents

To merge with another company in Indonesia, the following documents must prepared include:

– A merger plan
– Announcement
– A deed of merger
– Shareholders register
– A certificate of collective shares
– Approval from the Ministry of Law and Human Rights or other relevant agencies
– Business Identification Number

 
 

To acquire a company in Indonesia, the following documents must prepared include:

– Announcement
– GMS resolutions
– A sale and purchase agreement
– A deed of transfer
– Shareholders register
– A certificate of collective shares
– Approval from the Ministry of Law and Human Rights or other relevant agencies
– Business Identification Number

Your Turnkey Solution for Mergers & Acquisitions In Indonesia

Cekindo’s mergers and acquisitions services in Indonesia are designed to help our 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.

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Selected Testimonials

  • I am thankful for Cekindo, as they assisted me for several months to obtain my business visa and enter Indonesia. I was in constant contact with valuable consultants the provided me with updated information during this precarious time. Today, my being in Jakarta is not a miracle – it was made possible by Cekindo.

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    Balev Corporation
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    I would like to acknowledge the exceptional service that PT. Cekindo Business International provided to me and my company. I needed to attend a meeting in Jakarta in October 2020 and because of the COVID-19, there were some restrictions with regard to visa application. I made the right decision by consulting with the visa team at Cekindo. The application process was expertly handled. The team ensured the visa was issued well ahead of time for my trip. I would recommend PT. Cekindo Business International to anyone looking for expert help in managing the visa application process.

    Tim Stewart
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  • logo-PT-Asia-Victory

    Prior to choosing Cekindo as our business partner in Indonesia, we interviewed and compared several companies. Finally, we chose to cooperate with Cekindo because of its professionalism and quality. Cekindo has assisted us in many ways, from company certification application to KITAS application and financial statement compliance to the fulfillment of other tax obligations in Indonesia. We appreciate the team’s fast response and professionalism in preparing the financial statements, among others.

    Doris Chen
    PT. Asia Victory and PT. Bigger One
  • logo Toaster

    When I joined Toaster, it was already working with Cekindo. But it’s quick to see why Toaster chose Cekindo. Cekindo has been very helpful throughout. Toaster Headquarters is based in London. Indonesian tax laws are not our specialty. Cekindo’s team has helped us to understand Indonesian tax. They are very knowledgeable and dependable, and therefore a huge asset to our company.

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    Toaster

Selected Clients

cfld
aegisub
acapacific
decillion
elite
ezbuy
hydropol
innowangsa
lekise
ericsson
carmudi
onesecure
photobook malaysia
polyparts

Frequently Asked Questions

There are different types of companies in Indonesia. Should all companies refer to the same regulations when doing merger or acquisition?

What if a company that wants to buy another company is a foreign company? Are there limitations?

What are the most common acquisition transactions in Indonesia?

When a merger or an acquisition is about to be disclosed to the public, are there any specific requirements?

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