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Merger & Acquisition process in Indonesia has been conducted based on several regulations, depending on the sector in which the target company is engaged. Any change of shareholding composition resulting from either a merger or acquisition must be approved or acknowledged by the Indonesian Ministry of Law and Human Rights. The ministry is the department that oversees all limited liability companies, no matter the sector, non-public or public alike.
In case a foreign company wishes to acquire shares in an Indonesian company, generally, for most industries, an approval from the Investment Coordinating Board (Badan Koordinasi Penanaman Modal/”BKPM”) is required. For other industries type, primarily if they are heavily regulated, such as banking, finance, and telecommunications, are under specific government agencies. The government agencies such as the Financial Services Authority (Otoritas Jasa Keuangan/”OJK”), Bank Indonesia or the Ministry of Communication and Informatics. The OJK has supervisory authority for the takeover of public companies, and if the public company is listed at the Indonesia stock exchange, the IDX’s listing and trading rules will also apply, mainly when there is trading activity due to the M&A activity.
In some cases, multiple regulators may supervise a transaction if the target company’s status requires it. In the case of a public company engaged in the telecommunications sector acquisition’s, both the OJK and the Ministry of Communication and Information Technology will play a supervisory role…