Indonesia: KPPU sets out tests for change of control in M&A deals

31 Jul 2023    2 minute read

In brief

Following its launch in April 2023, the online notification form introduced by KPPU sets out a new set of tests for determining whether, and to what extent, a change of control has occurred in a non-majority acquisition. We summarize below these tests to help you understand how KPPU will view and assess change of control in non-majority acquisitions.

Contents

A set of questions to determine whether the baton of control has passed

The assessment on change of control under the previous regulation, i.e., KPPU Regulation No. 3 of 2019 relied heavily on the 2020 Guidelines, which provided a general benchmark to determine whether the baton of control has passed to a party that acquires less than 50% of the voting rights in the target.

Since the KPPU Regulation No. 3 of 2023 came into force on 31 March this year, and the online notification form was launched in April 2023, KPPU has not released any guideline other than the General FAQ and the guideline to fill in the online notification form (only available for registered users and in Indonesian language). If the notifying party says that it didn't acquire a majority of the shares in the target, the form will ask the following questions:

  1. Are there reserved matters that must be approved by the acquirer?
  2. Are there certain matters relating to management of the target that must be unanimously approved by all shareholders?
  3. Does the acquirer appoint the president director of the target?
  4. Does the acquirer appoint a majority of directors of the target?
  5. Does the acquirer appoint the finance director of the target?
  6. Does the acquirer appoint the operations director of the target?
  7. Does the acquirer appoint a majority of the commissioners of the target?
  8. Do directors appointed by the acquirer have veto rights over matters to be decided by the Board of Directors of the target?
  9. Are decisions of the Board of Directors of the target taken by a simple majority?
  10. Are decisions of the Board of Commissioners of the target taken by a simple majority?

The form simply asks for a "yes" or "no" response to each question. This set of questions indicates the scope of the assessment KPPU will do to determine whether the baton of control has passed in a non-majority stake acquisition.

* * * * *

LOGO_Indonesia HHP Law Firm_Jakarta

© 2023 HHP Law Firm. All rights reserved. HHP Law Firm is a member firm of Baker & McKenzie International. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

Contact Information
Mita Djajadiredja
Partner at BakerMcKenzie
Jakarta
Read my Bio
mita.djajadiredja@hhplawfirm.com
Dyah Ayu Paramita
Associate Partner at BakerMcKenzie
Jakarta
dyahayu.paramita@hhplawfirm.com

Copyright © 2025 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.