INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
1. Trends 1.1 M&A Market
the Indonesian Competition Commission (KPPU), reflecting the importance of execution certainty. • Increased emphasis on due diligence and down - side protection: Buyers are showing greater discipline in legal, regulatory and commercial due diligence, with more attention given to represen - tations and warranties, indemnity protection and conditions precedent. • Growing attention to ESG and sustainability-related considerations: Environmental compliance, govern - ance standards and broader sustainability issues are becoming more relevant in due diligence and investment decision-making, particularly in natural resources, infrastructure and energy transition- related sectors. 1.3 Key Industries Significant M&A activity in Indonesia over the past 12 months has been concentrated in several key sectors: • Natural resources and critical minerals: Transac - tions have been driven by Indonesia’s role in the global supply chain for nickel and other energy- transition minerals, attracting both strategic inves - tors and global mining groups. • Technology, media and telecommunications: The digital economy continues to generate deal activity, particularly involving digital platforms, fintech and telecommunications infrastructure. • Energy and energy transition: M&A activity has increased in renewable energy, power generation and related infrastructure, reflecting Indonesia’s broader energy transition and sustainability initia - tives. • Financial services: Consolidation and strategic investment have occurred in banking, fintech and other financial institutions, often involving regional or international investors. • Consumer and healthcare sectors: Investors con - tinue to target businesses benefiting from Indone - sia’s large domestic market and growing middle class, including healthcare providers and consum - er-facing businesses.
Compared with 12 months ago, Indonesia’s M&A mar - ket appears to have moved from a period of “wait and see” caution towards a more selective execution of strategic transactions. Earlier market sentiment was shaped by macroeconomic uncertainty and domestic political developments, which contributed to a more measured pace of deal-making. While overall transaction volumes appear to have remained relatively steady, aggregate deal value has been supported by several significant transactions, particularly in sectors aligned with Indonesia’s eco - nomic priorities, such as critical minerals; technol - ogy, media and telecommunications; and renewable energy/energy transition projects. Investors continue to be disciplined and increasingly focused on regulatory compliance, environmental, social and governance (ESG) considerations and long-term strategic value, rather than purely oppor - tunistic growth. Overall, the market remains active, but activity is more concentrated on high-quality, strategic transactions than it was a year ago. 1.2 Key Trends Key M&A trends in Indonesia over the past 12 months include: • Minority investments with enhanced governance protections: Investors have increasingly pursued minority stakes while negotiating shareholder arrangements that provide board representation, veto rights and reserved matters, enabling them to manage risk without acquiring full control. • Greater use of contingent pricing and risk alloca - tion mechanisms: Earn-outs, deferred considera - tion and escrow arrangements have become more common, particularly in technology and other growth sectors, as parties seek to bridge valuation gaps and manage post-closing exposure. • Stronger focus on regulatory structuring at an early stage: Transactions are increasingly being structured with upfront consideration of foreign investment restrictions, sector-specific licensing requirements, and merger control notification to
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