INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
5.5 Definitive Agreements In Indonesia, tender offers for public companies are primarily governed by OJKR 9/2018 and OJK Regula - tion No. 54/POJK.04/2015 on Voluntary Tender Offers (“OJKR 54/2015”). The terms and conditions of a ten - der offer are generally disclosed through the tender offer statement and public announcement submitted to and reviewed by the OJK. In practice, tender offer terms are not typically docu - mented in a definitive agreement with the target com - pany. Instead, the legally operative terms are those disclosed in the tender offer documentation in accord - ance with the applicable OJK regulations. Mandatory tender offers arise automatically following a change of control and must follow the prescribed regulatory framework, while voluntary tender offers may include certain conditions, subject to OJK review. 6. Structuring 6.1 Length of Process for Acquisition/Sale The timeframe for completing an acquisition in Indo - nesia depends on the size, complexity and regula - tory profile of the transaction. In a typical private M&A transaction, the process generally ranges from three to six months, including negotiation of key terms, due diligence, preparation and execution of transaction documents, satisfaction of conditions precedent and closing. The process may take longer where sector- specific approvals, foreign investment considerations or complex restructuring steps are involved. In the case of public company transactions, the over - all timeline is generally longer due to the additional regulatory and procedural requirements, including dis - closure obligations, takeover-related compliance and, where applicable, the mandatory tender offer process following a change of control. 6.2 Mandatory Offer Threshold In Indonesia, the mandatory tender offer regime applies to acquisitions of publicly listed companies that result in a change of control. Under the applica - ble capital markets regulations, a party that becomes the new controlling shareholder of a public company is generally required to conduct a mandatory tender
offer to acquire the remaining shares held by public shareholders. A change of control is typically presumed where a party acquires more than 50% of the voting shares of a company, although a change of control may also arise where a shareholder obtains the ability to deter- mine management or strategic decisions, even with a lower shareholding. Certain shareholders may be excluded from the man - datory tender offer process under the applicable OJK regulations, including parties acting in concert with the new controller and other controlling shareholders. 6.3 Consideration In Indonesia, cash consideration is the most common - ly used form of payment in M&A transactions, particu - larly in private acquisitions. Share-based considera - tion or share swaps are less common but may arise in group restructurings or transactions involving listed companies. In public company transactions, cash is generally preferred, particularly where a change of control triggers a mandatory tender offer under capital markets regulations. To address valuation uncertainty, parties commonly use mechanisms such as earn-outs, deferred consid - eration and escrow arrangements. 6.4 Common Conditions for a Takeover Offer In Indonesia, the acquisition of a private company does not trigger any obligation to conduct a takeover offer. By contrast, where an acquisition results in a change of control of a public company, the new con - trolling shareholder must conduct a mandatory tender offer in accordance with OJKR 9/2018. Mandatory tender offers must be conducted on pre - scribed terms and generally cannot be made subject to additional conditions, as the regulatory framework is designed to ensure equal treatment of minority shareholders. Voluntary tender offers are governed by OJKR 542015. In this context, the offeror may include certain condi - tions, although the terms of the offer remain subject to review and supervision by the OJK.
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