Update on Indonesia Business Competition Law:
New Merger, Acquisition, and/or Consolidation Notification System
One of the functions of the Business Competition Supervisory Commission (“Komisi Pengawas Persaingan Usaha – KPPU”) is to evaluate the investment activities which bear the risk of causing monopoly business activity and/or unfair competition. For this purpose, KPPU has put into place a regulation which requires investors to notify KPPU in the event of merger, shares/asset acquisition, and/or consolidation which amount has reached a certain threshold.
In relation to the above, KPPU recently updated its regulation concerning the merger, consolidation, and/or acquisition notification under KPPU Regulation No. 3 of 2023 regarding Assessment of Merger, Consolidation, or Acquisition of Shares and/or Assets Which May Result in Monopoly Practice and/or Unfair Business Competition (“KPPU 3/2023”) which has been valid since 31 March 2023. The key changes under the new KPPU 3/2023 are as follows:
Notification Through Electronic System
Under the previous regime, the merger, consolidation, and/or acquisition notification to KPPU can only be carried out manually (through direct meeting or post) or by email. Under KPPU 3/2023, notification shall be carried out electronically through accessing the http://notifikasi.kppu.go.id website.
Notification Obligation Threshold
While the amount of notification obligation threshold remains the same under the previous regime and under KPPU 3/2023, there is a difference in the calculation of such threshold. Under the previous regime, the notification obligation threshold is accounted based on the sales value in Indonesia region while the asset is accounted for all assets including assets owned by foreign entities. Under KPPU 3/2023, the notification obligation threshold shall only be accounted from the assets/sales value owned by the business owner either directly or indirectly in Indonesia only.
Fee Incurred for Merger, Acquisition, and/or Consolidation Notification
Under Government Regulation No. 2 of 2023 regarding Types and Tariffs on Non-Tax State Revenue which has been recently ratified on 5 April 2023, merger, acquisition, and/or consolidation notification to the KPPU shall be incurred a fee in the amount of 0.004% of the sales or asset value as set out in the notification or in the maximum amount of IDR 150,000,000 (one hundred fifty million Rupiah) or equivalent to USD 10,070 (USD 1 = IDR 14,895). This regulation shall be valid 30 (thirty) days upon the ratification of the same which shall fall on 5 May 2023.
In addition, based on the KPPU confirmation, the derivative or implementing regulation for KPPU 3/2023 has not been available. Therefore, although the new system for merger, acquisition, and/or consolidation notification has been in place, there might still be several practical problems and unclear details regarding the implementation.
If you need legal assistance in filing merger, acquisition, and/or consolidation notification, don’t hesitate to contact us at info@maulanalawfirm.com