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This client alert also discusses the new merger filing regulation, i.e., Indonesian Business Competition Supervisory Commission (“KPPU“) Regulation Number 3 of 2019 on Assessment of Merger or Consolidation of Business Entities or Share Acquisitions of Companies (“KPPU Regulation 3/2019“).

In another discussion with KPPU, we have received verbal answers to several of the questions that we discussed in our last two client alerts.

Below is a summary of these clarifications:

1. Updates on the criteria of the assets in an asset acquisition

In addition to KPPU clarification mentioned in the previous client alert, KPPU has further clarified that only acquisitions of productive assets that may bring economic benefit and increase the ability of the acquirer to control the relevant market need to be notified to KPPU.

The above policy is in line with the updates in our last client alert, and is not consistent with the text of KPPU Regulation 3/2019, which seems to require the notification to KPPU in the event there is merely a change of control over the assets.

Noting that KPPU has given its clarification on this subject twice on different occasions, we have the strong impression that KPPU is only targeting asset acquisitions with the above criteria.

2. Asset threshold calculation refers to the worldwide figures of the ultimate shareholder of the acquirer

Unlike the previous merger control regulation, which clearly sets out that the assets to be included in the threshold calculation are only the Indonesian assets, the new merger control regulation stipulates that the assets to be included in the threshold calculation are as follows:

a) assets of the acquirer and the target company

b) assets of the direct and indirect entities of the parties involved in the transaction

Further, KPPU Regulation 3/2019 stipulates that the asset figures should refer to the figures in the audited financial statements of the transacting parties. From the text of KPPU Regulation 3/2019, it is still not clear whether the calculation only covers the Indonesian target or goes beyond that.

Regarding the above matter, KPPU clarified that the assets should cover the worldwide figures of the assets of the ultimate shareholder of the acquirer contained in the consolidated financial statements. This method certainly enlarges the threshold for the asset calculation and it seems likely that more acquisition transactions will be captured than under the previous regulation, as it will also cover nonIndonesian assets.

We should note that the above clarification by KPPU is different with our clarification with them in our first discussion. So we think that until the implementing guideline is issued, there will be changes to KPPU’s policy in implementing this regulation.

3. “if required” data under the new template of the notification form

As we briefly mentioned in our first client alert regarding KPPU Regulation 3/2019, the notification form is now divided into two sections with detailed information on products being in section 2, which is now marked as “if required” by KPPU.

Section 2 covers the following information:

1) competitors of the acquirer and the target company

2) profile of consumers of the acquirer and the target company

3) profile of suppliers of the acquirer and the target company

KPPU further clarified that the above information is not required in the initial submission and only needs to be submitted if KPPU requires it. We have not tested this yet, but we will give an update in our next client alert once we have seen this policy being implemented.

4. Only overseas transactions that have a relevant market in Indonesia need to be notified

KPPU Regulation 3/2019 stipulates that any overseas transactions that have met the thresholds are required to be notified to KPPU. The text itself does not say anything about whether only overseas transactions that cover the relevant market in Indonesia (or in other words whether the overseas transactions should have market impact in Indonesia) need to be notified to KPPU. But KPPU clarified that they only require notification for overseas transactions that have a relevant market in Indonesia.

Suggested Approach

In the absence of the implementing guidelines and as a precautionary measure, we still suggest that the relevant parties submit the notification to KPPU if the basic thresholds (assets and sales figures have met the threshold, there is a change of control and the parties are not affiliated) are simply fulfilled. This is because we have not yet tested the implementation of this new regulation, and the risk of not notifying is being declared as making a late merger filing. Note that for the latter, the sanctions applied are quite high, i.e., administrative penalty of a fine of up to IDR 25 billion.

We will issue further updates as more clarifications arise, such as when the technical guidance to KPPU Regulation 3/2019 is issued.


Wimbanu Widyatmoko is a senior partner in Mergers & Acquisitions Practice Group. He has experiences in handling various legal corporate/commercial issues, corporate Indonesian tax and international tax planning on inbound and outbound investment. Wimbanu has been consistently ranked as a leading lawyer by leading legal directories, such as Chambers Asia, Asia Pacific Legal 500, AsiaLaw Profiles and International Tax Review for several years.


Mita Djajadiredja is a senior partner in the Mergers & Acquisitions Practice Group and the key contact for Technology, Media & Telecommunications in Indonesia. She has more than 20 years of experience in M&A and private equity, as well as corporate alliances, including joint ventures, shareholder agreements and strategic business alliances. Mita advises a wide range of domestic and international clients across various industry sectors, including real estate, insurance, finance, manufacturing and trading.