New Merger Control Rules in Indonesia: Mandatory Notification of Asset Acquisitions

Legal Updates
New Merger Control Rules in Indonesia: Mandatory Notification of Asset Acquisitions
8 November 2019

By Indrawan Dwi Yuriutomo

On October 2, 2019, Indonesia\'s Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha or \"KPPU”) issued Regulation No. 3 Year 2019 regarding Assessments of Mergers or Consolidations of Business Entities or Acquisitions of Company Shares which May Result in Monopolistic and/or Unfair Business Competition Practices (\"Reg. No. 3”).

Asset Acquisition

An asset acquisition must be notified to the KPPU, which has broadened the definition of acquisition to capture both share and asset acquisitions. Reg. No. 3 stipulates that a transfer of assets will be considered an acquisition if such transfer of assets:

  • results in the transfer of control of assets; and/or
  • increases the ability to control a certain market.

This new requirement changes the landscape of asset acquisition rules and regulations in Indonesia.

Value of Assets

According to Article 1 (18) of Reg. No. 3, assets means all assets that are owned by the business actor, both tangible and intangible, that are valuable or have an economic value. The value of the assets will be based on the asset values stated in the acquiring party\'s financial statements.

An acquisition of assets must be notified to the KPPU by the acquiring party within 30 business days as of the legal effective date of the asset sale and purchase agreement if either of the following thresholds is met:

  • the value of the acquiring party\'s assets exceeds IDR 2.5 trillion (or if the banking sector, the value of assets exceeds IDR 20 trillion); or
  • the sales value of the acquiring party in Indonesia exceeds IDR 5 trillion.

View of KPPU Officials

SSEK met with officials from the KPPU\'s advocacy department on November 5, 2019. While the information obtained from these officials is not necessarily the official position of the KPPU, we believe it is relevant as a reference in interpreting particular provisions of Reg. No. 3. During our consultation, the KPPU advocacy officials suggested that any number of asset transfers between companies that satisfy the asset and/or turnover threshold shall be notifiable to the KPPU. This includes the acquisition of even one plot of land or movable inventory that does not comprise a significant part of the acquiring party\'s total assets.

Nonetheless, the KPPU officials understood how the current threshold for notifiable asset acquisitions might seem unreasonable. They said the KPPU was drafting additional guidelines to complement Reg. No. 3, which should clarify and provide more reasonable standards for notifiable asset acquisitions. However, as of this writing, with only Reg. No. 3 having been enacted, all asset acquisitions, no matter the value of the asset(s) being transferred, must be notified to the KPPU if the applicable asset and/or turnover thresholds are met.

Asset Acquisition Outside the Territory of Indonesia

Mergers, consolidations or acquisitions of shares and/or company assets that meet the notification value and occur outside the territory of Indonesia must also be notified to the KPPU, if any or all parties involved in the transaction carry out business activities or sales in Indonesia.

Assessment by KPPU

Once a notification has been submitted, the KPPU will evaluate whether there are any indications in the asset transaction of monopolistic and/or unfair business competition practices. Such assessment should involve the following analysis:

  • Market concentration;
  • Entry barriers;
  • Unfair competitive behavior;
  • Efficiency; and/or
  • Bankruptcy.

Reg. No. 3 expands the KPPU analysis to the following:

  • Policies aimed at improving the competitiveness of and strengthening national industries;
  • Technological developments and innovations;
  • Protection of micro-, small- and medium-scale enterprises;
  • Impact upon manpower; and/or
  • Implementation of applicable laws and regulations.


The KPPU can impose a fine of IDR1 billion per day up to a maximum of IDR25 billion for late notification.


It is important to note that if the transaction is carried out between affiliates, the asset transaction is exempted from mandatory notification to the KPPU.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user\'s own risk. You should contact a lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.

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