Acquisition Transaction

M. Fadra Heryndra
Jakarta, August 2019
What is Acquisition?

Art. 1 number 11 UU No. 40/2007

any legal act committed by a legal entity or an individual to acquire shares of a Company, resulting in the control over such a Company passing.

Art. 125 (6) Art. 125 (1) & (2) Art. 125 (7)
Amicable Acquisition Hostile Takeover

An Acquisition shall be conducted by

acquiring shares that have been issued
and/or will be issued by the Company
through the Board of Directors of the
Company or directly by the
shareholders.

An Acquisition may be conducted by a

legal entity or individual.
What is Acquisition?

Takeover

Legal
Business
Perspective
Perspective

Hostile Friendly Bailout Horizontal Vertical Conglomerate

Takeover Takeover Takeover Takeover Takeover Takeover

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Why Acquisition?

As a way to enter a foreign market.

If a company wants to expand its operations to another country, buying an existing company in that country could be
the easiest way to enter a foreign market. The purchased business will already have its own personnel, a brand
name, and other intangible assets, which could help to ensure that the acquiring company will start off in a new
market with a solid base.

As a growth strategy.

Perhaps a company met with physical or logistical constraints or depleted its resources. If a company is encumbered
in this way, then it's often sounder to acquire another firm than to expand its own. Such a company might look for
promising young companies to acquire and incorporate into its revenue stream as a new way to profit.

To reduce excess capacity and decrease competition.

If there is too much competition or supply, then companies may look to acquisitions to reduce excess capacity,
eliminate the competition, and focus on the most productive providers.

To gain new technology.

Sometimes it can be more cost-efficient for a company to purchase another company that already has implemented a
new technology successfully than to spend the time and money to develop the new technology itself
Acquisition Process
PRE-TRANSACTION
- Due Diligence
- Negotiation
- Letter of Intent/Minutes
of Understanding
- Terms Sheet
- Deal Structuring
TRANSACTION POST-TRANSACTION
- Conditional Sell and Purchase Agreement/ - Shifting Liability
Conditional Share Subscription Agreement - Notification
(Condition Precedent or Condition Subsequent)
- Sale Purchase Agreement
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Acquisition Approval from GMS

Art. 89 (1) Law No. 40/2007 Art. 89 (3) Law No. 40/2007

A GMS to approve a Merger, Consolidation, Acquisition, or Division,

filing of a petition for a Company to be declared bankrupt, extension
of duration, and dissolution of a Company may be held if at the
meeting at least ¾ (three fourths) of the total amount of shares having
voting rights are present or represented at a GMS and a resolution
shall be valid if approved by at least ¾ (three fourths) of the total
amount of votes cast, unless the articles of association provide for a
greater quorum for attendance and/or for the requirements for
adoption of a resolution of the GMS.
A second GMS as intended by section (2) shall be valid and entitled
to adopt a resolution if at the meeting at least 2/3 (two thirds) of the
total amount of shares having voting rights are present or represented
at the GMS and a resolution shall be valid if approved by at least
¾ (three fourths) of the total amount of votes cast, unless the articles
of association provide for a greater quorum for attendance and/or for
the requirements for adoption of a resolution of the GMS.

Art. 126 (1) Law No.

40/2007

Legal acts of Merger, Consolidation, Acquisition, or Division must have due

regard to the interest of:
a. the Company, the minority shareholders, employees of the Company;
b. the creditors and other business partners of the Company; and
c. the public and fair competition in doing business.

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Acquisition in Competition Law

GR No. 57/2010 Law No. 5/1999 Law No. 5/1999

Art. 1 number 3 Art. 29 (1) & Art. 28 (2)

Acquisition is a legal act

carried out by a Business
Actor to acquire shares in a
Business Entity which
results in the transfer of
control over the Business
Entity.
Merger or Consolidation or Acquisition A party are prohibited from
of shares which results in asset value taking over shares of other
and sales value exceeding a certain companies if such actions can
amount, must be notified to KPPU, no result in monopolistic
later than 30 days after the Merger or practices and / or unfair
Consolidation or Acquisition. business competition.

GR No. 57/2010
Art. 5 number 3
As a result, the assets value and / or the sales value exceeds a certain amount
in writing to KPPU no later than 30 days from the legal effective date of the
Merger or Consolidation or Acquisition.

The assets value and / or sales value is calculated based on the

Assets value amount of Rp Bagi pelaku usaha di Perbankan
sum of the assets value and / or sales value of the Business Entity
2.500.000.000.000; and /or menyampaikan pemberitahuan
which directly or indirectly controls or is controlled by the Business
sales value amount of Rp secara tertulis jika nilai aset
Entity resulting from the Merger, or the Consolidation or which takes
5.000.000.000.000 sebesar Rp 20.000.000.000.000;
over the shares of other companies and is taken over
Position Case of PT Limas Tunggal’s Acquisition

2018 PT Limas Tunggal End User

Offtaker
PT Tambang Berkat PT Batuah Energi
Karunia Prima
Jual Beli 10jt MT

2019 PT Batuah Energi

PT Limas Tunggal Jual Beli
Prima

Jual Beli 10jt MT “Going Concern”

PT Tambang Berkat
Karunia

Controller

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Acquistion of PT Batuah Energi Prima

PT Batuah Energi
PT Limas Tunggal Acquisition
Prima

Kelangsungan Usaha or
“Going Concern”

The Principle of Going Concerns

In this law, there are provisions that enable a

prospective company of the debtor to survive

Art. 165 Law

No. 37
Bankruptcy
ceased

Bankrupt

Bankrupt Insolvency/
Verification Reconciliation
Declaration Settlement
Art. 215
Law No. 37
Rehabilitation
Art. 187 Law No. 37/2004

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Acquisition Process for Limas Case

PRE-TRANSACTION TRANSACTION POST-TRANSACTION

PT Batuah Energi
PT Limas Tunggal Acquisition
Prima

Amicable Acquisition Hostile Takeover

Condition Condition
Debt Equity Swap Subsequent Subsequent

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Thank You