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New development: asset acquisitions caught by the Indonesian merger control regime

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Reksodiputro Harun
Harun Reksodiputro

Partner, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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Samid Sam
Sam Samid

Senior Associate, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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24 October 2019

New merger control guidelines in Indonesia provide that asset acquisitions are now transactions that need to comply with merger notification obligations, despite the Anti-Monopoly Law and government regulation clearly limiting the obligation to obtain merger control approval for share acquisitions only.

Besides, new facts and elements will now need to be analysed and reporting parties will also need to submit any requested document within the deadline imposed, failing which their deals may be approved or not based on the authority’s assumptions or information in its possession.

On 2 October 2019 and amidst rumours that Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unhealthy Business Competition (the Anti-Monopoly Law) will be overhauled within this year (partly because the draft anti-monopoly law (the Draft Law) has been in circulation for more than five years), the Indonesian competition authority, the Commissioners of the Business Competition Supervisory Committee (Komisi Pengawas Persaingan Usaha – the KPPU) issued Regulation No. 3 of 2019 on the Assessment of Mergers or Consolidations or Acquisition of Shares of a Company which Could Cause Monopolistic Practices and/or Unhealthy Business Competition (the Regulation.

The Regulation expands the scope of the merger control regime in Indonesia, which many had suspected would only have been addressed by the amendment to the Anti-Monopoly Law. The Regulation also revoked all other guidelines on merger control previously issued by the KPPU. Some key elements of the Regulation are set out below. The term merger includes a legal merger, a consolidation and an acquisition.