INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
Therefore, the calculation of the jurisdictional threshold is on a group-wide basis – given that it does not only concern the transacting parties, but also includes the affiliates or subsidiaries of the transacting parties. For the avoidance of doubt, a seller’s turnover and assets do not need to be included in the calculation of the threshold. The jurisdictional thresholds are also met if only one party involved in the transaction meets the threshold. The merger control regulations do not specify how changes in business should be reflected in the threshold calculation. In practice, with regard to other acquisitions, the KPPU usually requires the notifying party to include the sales and assets of the newly acquired entities in the threshold calculation as though they had been part of the group for the entire reference period. As regards business closures or divestments during the reference period, in practice, the fig - ures of the closed or divested entities usually do not need to be included in the threshold cal - culation. 2.8 Foreign-to-Foreign Transactions Foreign-to-foreign transactions are subject to merger control if the transaction fulfils the cri - teria that are caught by Indonesian merger con - trol rules. Further, it should be assessed whether both the transacting parties have nexus in the Indonesian market. A transaction has nexus if at least two parties engaged in the transaction carry out business activities in or sales to Indo - nesia or have assets in Indonesia. The term “business activities in Indonesia” can be broadly interpreted and includes:
• direct and indirect (portfolio) equity invest - ments in Indonesian limited liability compa - nies; • investments in financial instruments other than shares, such as loans or assets; • contractual rights; • participation in units or trusts, whether direct or indirect; or • establishing a representative office. The dual nexus requirement for foreign-to-for - eign transactions is another major change intro - duced by Regulation 3/2023. Under the previous regime, foreign-to-foreign transactions could be notifiable if either party (or its affiliate/subsidiary) had nexus in Indonesia (single nexus). The KPPU’s current approach is that the dual nexus criterion is only met if both the acquirer (or its affiliates/subsidiaries) and the target (or its subsidiaries) have assets or sales in Indonesia. 2.9 Market Share Jurisdictional Threshold Indonesia does not have a market share jurisdic - tional threshold. 2.10 Joint Ventures Joint ventures are subject to merger control regulations, except for “Greenfield” joint ven - tures. However, any share or asset transactions carried out following the establishment of the ”Greenfield” joint venture are considered notifi - able transactions, if all notifiability requirements are met. 2.11 Power of Authorities to Investigate a Transaction The KPPU has no authority to investigate trans - actions that do not meet the jurisdictional thresh - olds under merger control regulations. However, it can initiate an investigation into the parties
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