Member Article

Under Government Regulation Number 57 and Indonesian Competition Authority (KPPU) Guidelines Number 02 , the criteria for determining whether a foreign merger (the definition includes a share acquisition) conducted outside Indonesia is reportable under the current Indonesian merger control rule (please note that the current merger control rule are the following:

1. The Asset and/or revenue thresholds

The value thresholds for a reportable transaction are:

a. the combined audited value of the Indonesian assets of the transacting parties must exceed IDR 2.5 trillion (approximately USD 180 million), but a different asset value threshold applies if the transacting parties are banks; and/or

b. the combined audited value of the Indonesian sales (turnover) of the transacting parties in Indonesia (excluding exports) must exceed IDR 5 trillion (USD  360 million), excluding exports.

These values are calculated based on the asset and/or sales values of the transacting parties on a company group basis (from the highest HoldCo/parent company down to all the controlled subsidiaries) in Indonesia during the most recent financial year if an audited financial statement is available.

In the event of any meaningful deviation (more than 30%) in the most recent year’s value from the 2 (two) preceding years’ value, the average value for the 3 (three) most recent years should be calculated, if a financial audited statement is available to determine whether the threshold has been met.

2. The transaction is between non-affiliated parties

Under the current merger control rule, “affiliated” means (i) the parties are under common control, or (ii) one party controls the other.

3. The transaction will result in a change of control over the target company

According to the elucidation of Article 5 (4) (b) of GR 57/2010, control is presumed to exist if:

a. share ownership or control of voting rights in a business entity exceeds 50% (fifty percent); or

b. share ownership or control of voting rights is less than or equal to 50% (fifty percent) but the shareholder can influence or determine the management policy of the business entity and/or influence and determine the management of the business entity.

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