INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
ble to acquisitions. However, acquisitions involving sensitive or regulated sectors may still be subject to government or regulator scrutiny under the applicable investment, licensing and sector-specific regulatory framework. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments The most significant recent legal development in Indo - nesia is the reform of merger control under KPPU Reg - ulation No. 3 of 2023. The regulation modernised the notification regime, expressly covering acquisitions of shares and/or assets, clarified the role of change of control, and refined the Indonesian nexus for offshore transactions. In the public company M&A space, OJK Regulation No. 45 of 2024 is also important, particu - larly in relation to issuer/public company governance, disclosure and go-private/delisting matters. 3.2 Significant Changes to Takeover Law There have been no fundamental overhauls of Indo - nesia’s takeover regime in the past 12 months. The takeover rules for public companies continue to be primarily governed by OJK Regulation No. 9/ POJK.04/2018 on the Takeover of Public Companies (“OJKR 9/2018”), which regulates change-of-control transactions, mandatory tender offers and disclosure requirements. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies In Indonesia, stakebuilding prior to a formal takeover offer is not common. In practice, acquisitions of con - trol of Indonesian public companies are more com - monly implemented through negotiated transactions rather than incremental stakebuilding in the market. 4.2 Material Shareholding Disclosure Threshold In general, the shareholding composition of a com - pany is maintained by the company, and all changes must be reported to the MoL via the AHU system so
that the updated shareholding composition is reflect - ed in the official corporate registry. For public companies, additional disclosure require - ments apply. Under OJK Regulation No. 4 of 2024 on Reports on Ownership or Changes in Ownership of Shares in Public Companies, any party that directly or indirectly holds at least 5% of voting shares, or other - wise qualifies as a controlling shareholder, must report its share ownership and any subsequent changes in ownership to the OJK. The report must be submitted within five business days from the date of the trans - action. There are sectors that impose additional disclosure and approval obligations for changes in share owner - ship, particularly the following sectors: • Mining sector: For mining companies holding IUP or IUPK licences, changes in share ownership must generally be reported to and approved by the MoEMR, particularly where the transfer results in a change of control. The government may also require Indonesian participants to divest, which further affects share ownership changes. • Electricity sector: In the electricity sector, share transfers involving companies holding electricity supply licences (IUPTL) may also require notifica - tion or approval from the MoEMR, particularly where the transfer affects control of the licence holder. • Oil and gas sector: For oil and gas upstream activi - ties, a change in participating interests or owner - ship structure generally requires approval from SKK Migas and the MoEMR, particularly where it affects the rights and obligations under a produc - tion sharing contract. 4.3 Hurdles to Stakebuilding Under the Company Law, the AoA of a limited liabil - ity company may require that any transfer of shares or change in shareholding is subject to approval by the shareholders through a GMS. While the Company Law prescribes statutory minimum quorum and vot - ing thresholds, companies are permitted to stipulate more stringent quorum or approval requirements in their AoA. In practice, where the AoA impose higher thresholds, those provisions will prevail.
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