INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat (Agung), Gustaaf Reerink, Adri Dharma, Karina Widyaputri and Ilma Sulistyani, ABNR Counsellors at Law
Joint ventures are, in principle, subject to Indone - sian merger control regulations unless they qualify as greenfield joint ventures. For the avoidance of doubt, any mergers, consolidations, or acquisitions under - taken by a joint venture after its establishment remain subject to merger control, provided that the above criteria are met. Jurisdictional Thresholds The jurisdictional thresholds for mandatory post-clos - ing notification are: • the combined value of assets in Indonesia exceeds IDR2.5 trillion (approximately USD145 million) or, if all undertakings involved in the transaction are active in the banking sector, IDR20 trillion (approxi - mately USD1.16 billion); and/or • the combined turnover in Indonesia exceeds IDR5 trillion (approximately USD290 million). Of relevance to the calculation are worldwide assets or sales (turnover) in Indonesia of the acquirer and all undertakings (including the target) that, following the acquisition, directly or indirectly control, or are controlled by, the acquirer. This includes the ultimate beneficial owner, which is the highest controller of a group of undertakings that is not controlled by any other undertaking. Accordingly, the Indonesian assets and/or sales include those of: • the acquirer; • the target; • the ultimate parent entity of the acquirer; • all controlled direct and indirect subsidiaries of the ultimate parent entity of the acquirer with sales and/or assets in Indonesia; and • all controlled direct and indirect subsidiaries of the target with sales and/or assets in Indonesia. The jurisdictional thresholds are also met if only one party involved in the transaction meets the threshold. The asset value and turnover are calculated based on the consolidated audited financial report of the ulti - mate parent entity – or, if no consolidated financial report is available, the financial reports of the ultimate parent entity and each of its subsidiaries – in all cases
that occurred during the last year before the transac - tion date. Turnover includes sales of products produced domes - tically and imported products. Exported products should be excluded from the calculation. If the asset or sales value of a party involved in the acquisition has decreased by 30% or more in an accounting year as compared with the year before, the value is calculated on the basis of the average of the past three years or, if the decrease occurred in under three years, the average of the past two years. Applicable Exemption A transfer of assets (tangible or intangible) is equiva - lent to a share acquisition and, accordingly, should be notified to the KPPU if there is: • a transfer of their management control or physical control; or • an increase in the ability of the acquirer to control a relevant market. However, the following asset transfers are exempt. • A non-bank asset transfer transaction valued at less than IDR250 billion (approximately USD14.5 million). • A bank asset transfer transaction valued at less than IDR2.5 trillion (approximately USD145 million). • A transfer of assets that is carried out in the ordi - nary course of business (this depends on the busi - ness profile of the acquiring party and the purpose of the acquisition). Transactions in the ordinary course of business are: (a) transfers of assets that are finished goods from one undertaking to another for resale to consumers by an undertaking that is active in the retail sector (ie, the sale of consumer goods by retailers); and (b) transfers of assets that are supplies to be used within three months in the production process (ie, the purchase by an undertaking of raw materials and basic components from various sources for production). • The assets have no relationship with the business activities of the undertaking acquiring the assets.
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