Indonesia – New KPPU Regulation On Merger Filings – Simplification Yet Some Clarity Is Needed.

the asset threshold of IDR 2.5 billion, even if the value of their assets in Indonesia is less than that. Meanwhile, in the Previous Regulations, it was clearly stated that the assets the value of which was to be calculated were only those in Indonesia.

Another example is the provision on local effect test under which applies to foreign mergers. Under the New Regulation if at least 1 (one) of the parties to a transaction has business in or sales to Indonesia, the local effect test is met. This is different from such a provision under the Previous Regulations which stated that a local effect test is met if both parties have business in Indonesia, or if only one party has business in, then the other one must at least has sales to Indonesia. Under the New Regulation, an acquisition of a target company active in Indonesia (indirectly, via controlled subsidiary) by a foreign party which does no business in or sales to Indonesia may be a reportable transaction.

Receipt of Submissions: KPPU can Reject Non-Complete Submissions

Before 2019, KPPU tended to accept merger noti cations or reports even if the documents submitted were limited, eg only the noti cation form. Starting from early 2019, KPPU has been stricter and applying an unwritten policy of only accepting noti cations with all the minimum documents required.

Now, this policy is formally imposed under Article 10 of the New Regulation under which KPPU will only accept noti cations with the complete (minimum) documents during the KPPU’s working hours and will record the date of receipt and issuance of the receipt document.

KPPU will issue a receipt of the documents, if noti cation documents consist of at least the noti cation form and the following supporting documents:

• the audited nancial reports of the undertakings concerned for the last 3 audited nancial years;

• the ownership charts of the undertakings concerned;

• the constitutional documents of the undertakings concerned (before and after the transaction);

• the company pro les of those involved in the undertakings concerned;

• a summary of the transactions;

• the business plan;

• an analysis of the impacts of the transaction.

KPPU now allows and recommends that noti cation documents be submitted in a soft copy. The Noti cation Form: Less Information at the Early Stage and a Change of Format

The stricter completeness assessment is compensated for by the fact that the initial information required by the noti cation form is less than before, at least at the early stage. Information about the party’s competitors, consumers and suppliers, only needs to be submitted if KPPU requests it. Although there is no clear explanation of in what kind of situation KPPU may request such information, at least the absence of this information at the early stage will not cause the documents submitted to be incomplete and rejected by KPPU. Otherwise, it would be challenging to ensure that complete information was submitted while racing to meet the 30 (thirty) working day deadline. The New Regulation does also provide the date of the conversion rate to be used to determine Rupiah equivalent for amounts in foreign currencies.

The Previous Regulations provided different forms for each kind of transaction and differentiated between the forms for post-merger noti cations (compulsory) and pre-merger consultations (non-compulsory). This is not the case with the New Regulation which provides a new general noti cation form to be used for all kinds of reportable transactions, ie mergers, consolidations and acquisitions of shares or assets. The same form will be used as a guideline for pre-merger consultations with KPPU.