Update on Indonesia’s Merger Filing Procedures

Notifiable Transaction

The KPPU Regulation 3/2023 sets out that a transaction is notifiable if :

• it meets the sales or asset value threshold;
• it results in change of control;
• it does not constitute an affiliated transaction; and
• both parties generate revenue from and/or have assets in Indonesia.

Threshold on Sales and Asset Value

Similar to its predecessor regulation, the KPPU Regulation 3/2023 sets the following threshold:

• combined sales value exceeding IDR5 trillion (approx. USD340 million); or
• combined asset value exceeding IDR2.5 trillion (approx. USD170 million).

For transactions concluded by two parties active in the banking sector, they will be notifiable if the combined assets value exceeds IDR20 trillion (approx. USD1.3 billion).  If only one of the parties is active in the banking sector, the standard sales and assets value thresholds (IDR5 trillion and IDR2.5 trillion) apply.

Focus is only on Indonesian Assets

Although the IDR2.5 trillion threshold remains, the calculation is now only limited to assets in Indonesia.

Change from Single to Double Nexus Approach

Previously, an offshore transaction (foreign-to-foreign) was notifiable even if only one of the parties involved has assets or sales from Indonesia with value exceeding the determined threshold. Now, after the issuance of the KPPU Regulation 3/2023, an offshore transaction will be subject to merger filing obligation only if both parties generate revenue from and/or have assets in Indonesia.

As a result, under the KPPU Regulation 3/2023 there is a change from a single to double nexus approach to identify whether a transaction is notifiable. 

Updated Filing Process

Businesses are now required to submit the notifications online through the KPPU’s website at https://notifikasi.kppu.go.id. Operational hours to submit the notifications are from 9am – 2pm JKT every business day.

However, as of this alert, we understand that the notifications are still being submitted through the designated KPPU email address on a transitional basis.

Filing Fee

In addition to the abovementioned updates regarding the KPPU Regulation 3/2023, we understand that the government has introduced a new filing fee by the issuance of the Government Regulation No. 20 of 2023 on Types and Tariffs of Non-Tax State Revenue Applicable to the KPPU.

The filing fee is calculated with the following formula:

“0.004% multiplied with the asset or sales value that exceeds the threshold, whichever lower.”

The maximum threshold for the merger filing fee is IDR150 million (approx. USD10,000) – the determination and payment of such fees will be instructed by the KPPU after it has examined and confirmed that the transaction in question is actually notifiable.

The filing fee will be applicable from 5 May 2023.

Authored by Chalid Heyder, Teguh Darmawan, and Andera Rabbani.