Mergers & Acquisitions

Mergers & Acquisitions (M&A) In Indonesia

The landscape for foreign investment in Indonesia is improving as the Indonesian government works to relax foreign investment regulations and make doing business in Indonesia easier. These recent regulatory changes impact the Mergers and Acquisitions landscape in Indonesia. Read on to find out how we can navigate you through your M&A in Indonesia.

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A. Regulatory Advisory On Mergers & Acquisitions In Indonesia

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

Foreign firms and investors should be aware of recent changes to Indonesia’s Positive Investment List. This list specifies the business lines open to foreign investment and the maximum percentage of foreign shareholding. Please complete the form below, and one of our M&A consultants will contact you shortly.

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

B. A Guide to the Types of Mergers & Acquisition Transactions

According to Indonesian Company Law, the following are the most common types of Mergers and Acquisitions transactions in which we can assist.

  • Mergers In Indonesia. The acquired entity legally acquires all assets and liabilities. The remaining businesses have lawfully been liquidated.
  • Consolidations in Indonesia. All entities have been legally liquidated, and all assets and liabilities have been legally transferred to a newly formed entity.
  • Share or Asser Acquisitions in Indonesia. A legal entity purchases shares of a company’s assets, resulting in a change of control in the acquired entity. The Indonesian Company Law imposes stringent procedures, such as a Public Acquisition Announcement, Sale and Purchase Agreement, and Deed of Transfer.

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

C. Processing Mergers and Acquisitions Transactions

In general, the procedures of Mergers and Acquisitions in Indonesia are summarized 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)

Investigating the company’s financial history and problems is required for the company that will be acquired. A potential investor must conduct extensive research to avoid making a mistake. Due diligence is also helpful in determining the risk of the business being acquired.

From a regulatory standpoint, a merger or acquisition takes at least 30 days to complete successfully. However, due to the negotiation and diligence processes, it may take longer.

D. Filing The Mergers and Acquisitions Documents

  1. To merge with another company in Indonesia, the following documents must be prepared:
    • 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
  2. To acquire a company in Indonesia, the following documents must be prepared:
    • 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

E. Your Turnkey Solution for Mergers & Acquisitions In Indonesia

Abisnis’s merger and acquisition services in Indonesia are intended to assist clients in achieving their strategic objectives. Our comprehensive services include valuation, negotiation, completion, and financial 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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