Merger & Aquisition – Indo Prime

Mergers & Acquisitions (M&A) In Indonesia

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

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.

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.	Government 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
8.	KPPU 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
9.	OJK Regulation No. 9/POJK.04/2018 on Public Company Takeover
10.	OJK Regulation No. 74/POJK.04/2016 on Merger or Consolidation of a Public Company

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.

Merger In Indonesia

Consolidations In Indonesia

Share or Asset Acquisitions In Indonesia

Merger In Indonesia

Consolidations In Indonesia

Share or Asset Acquisitions In Indonesia

*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

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

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

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

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

*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

Indo prime’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.

Get in touch with Us

Frequent Asked Questions

How many types of business licenses are there in Indonesia?

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Is it mandatory to apply for a permanent business license in Indonesia?

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.

What Our Clients Say

After comparing several consultants, I found Indo Prime Indonesia is a international and professional organization with good understanding of local market. Indo Prime Indonesia helped our company to set up our first Indonesian entity, and also helps with day-to-day operation. Indo Prime 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.

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 Indo Prime. 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.

We chose Indo Prime because we considered Indo Prime as a professional company with a good attitude and a streamlined business model. Indo Prime met all our expectations as it created the atmosphere of accountability and transparency. The most significant added values that we received from cooperation with Indo Prime are the time we saved and mistakes we avoided.

Indo Prime 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. Indo Prime 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.