The Indonesian Business Competition Supervision Commission (Komisi Pengawas Persaingan Usaha – “KPPU”) recently introduced a new regulation on merger filings, KPPU Regulation No. 3 of 2019 on Assessments of Mergers or Consolidations of Business Entities or Acquisitions of Shares in Companies which might Result in Monopolistic Practices and/or Unfair Business Competition (“New Regulation”). This regulation replaces the KPPU’s previous regulations on merger filings (“Previous Regulations”) including amongst others KPPU Regulation No. 2 of 2013.
Some key or notable changes in the New Regulation are the following:
Reportable Transactions: the inclusion of Acquisitions of Assets
The Previous Regulations required mergers, consolidations and share acquisitions meeting certain requirements to be reported to the KPPU. The New Regulation requires acquisitions of assets to be reported also.
This is inconsistent with the relevant higher regulation, Government Regulation No. 57 of 2010 on Mergers or Consolidations of Business Entities or Acquisitions of Shares in Companies which might Result in Monopolistic Practices and/or Unfair Business Competition (“GR 57/2010”), under which the ‘Acquisitions’ which must be reported to KPPU exclude acquisitions of assets. It has yet to be seen whether a provision which arguably deviates from its upper level regulation can be fully enforced.
Not only does the provision cause the New Regulation to be inconsistent with the upper level regulation of which it serves as an implementing regulation, it will also cause confusion because the title of the New Regulation indicates that asset acquisitions are of no concern.
Written by Lia Alizia, Yohanes Masengi, Jonathan Tjenggoro, and Benedicta Frizka, read about some key or notable changes by clicking this link.