In our experience, an acquisition or a takeover is often carried out to gain control of a company. For the acquiring company, an acquisition is considered as an easier way to enter a certain business field, rather than having to establish a new company, which will take time and cost in obtaining all kinds of permits needed to get the business running.

For example, a foreign mining company or foreign airline that is financially stronger may try to acquire a company in Indonesia that has enough experience in running its business but is financially weaker. It is not uncommon for this share takeover to be carried out by an investor/investment company in the development of its business.


By owning the majority of shares of the target company, the acquiring company has a bigger chance of securing votes in the General Meeting of Shareholders (GMS). One example is that the acquiring company has a greater chance of appointing members of the Board of Directors as well as members of the Board of Commissioners. Furthermore, usually, the target company's Articles of Association will also be revised accordingly to the interests of the acquiring company.


The current legal provision distinguishes between an acquisition through the Board of Directors and acquisition through the GMS. Acquisition through the Board of Directors requires a summary of the acquisition plan to be announced in the newspaper. This summary is a synchronization of the acquisition proposals submitted by the Board of Directors of both parties. This summary usually will include financial statements from both the acquiring company and the target company, consolidated balance sheet of the acquiring company after the takeover, method to resolve disagreements with shareholders, as well as the status of rights and obligations of directors, commissioners, and employees.

Whereas an acquisition through the Shareholders does not require prior composition of the plan of acquisition, but are still required to announce in the newspaper the plan of acquisition agreement as well as announcement that the acquisition has been carried out.

Hence, in our experience, a good approach and socialization with the target company are needed, in order to prevent major problems occurring from objections by creditors or employees, as a result of the acquisition announcement (either through the Board of Directors or through Shareholders). 

Many companies opt for acquisition through Shareholders, if it can be done voluntarily. For instance, is when the target company is struggling to keep the business running due to financial reasons and urgently requires an acquisition.

It is also equally important to keep in mind any existing loan agreements with creditors. Many loan agreements contain provisions that prohibit a change of shareholders, prior to the settlement of the debt.



Said, Sudiro & Partners

Indonesian Legal Consultants

Sampoerna Strategic Square

South Tower, Level 30

Jl. Jend. Sudirman Kav. 45 - 46

Jakarta 12930 Indonesia

Phone: (62-21) 575.0983

Fax: (62-21) 575.0803





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