INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
11. Activism 11.1 Shareholder Activism
11.2 Aims of Activists In Indonesia, shareholder activists generally do not play a significant role in encouraging companies to pursue mergers, spin-offs or major divestitures. Stra - tegic decisions of this nature are typically initiated by management and controlling shareholders. In practice, corporate restructurings such as spin-offs or divestitures are more commonly driven by regu - latory requirements, business strategy or ownership restrictions rather than activist shareholder cam - paigns. 11.3 Interference With Completion Interference by activist shareholders in announced transactions is relatively uncommon. Due to con - centrated ownership structures, minority sharehold - ers typically lack sufficient voting power to block a transaction once the required quorum and majority approval at the GMS have been obtained.
Shareholder activism has not yet emerged as a domi - nant force in Indonesia, largely due to the concentrat - ed ownership structures of most companies, where controlling shareholders typically hold a majority stake. As a result, strategic decisions such as merg - ers and acquisitions are generally determined through majority voting at the GMS. Nevertheless, minority shareholders in public compa - nies may raise concerns relating to corporate gov - ernance, transparency, conflicts of interest, affiliated transactions and transaction fairness. Minority share - holders may also exercise appraisal rights or pursue legal action where there are allegations of governance breaches. While shareholder activism rarely determines the out - come of M&A transactions, it may generate public scrutiny or regulatory attention, particularly in public companies.
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