Fitri Novia Heriani, Yanuar Pribadhie
In the commercial world, mergers between companies is a common occurrence. Mergers make sense because companies, by nature, want to expand their market share, enter new markets and obtain skills and information to support the growth and stability of their business.
Although it is common practice, mergers between companies requires attention to a number of considerations. One important consideration, as asserted by Muhammad Nawir Messi, the Chairman of the Business Competition Supervisory Commission (KPPU), is that in certain circumstances companies must secure KPPU approval .
The merger of two or more businesses seems procedurally exhausting. From a legal and regulatory perspective, all relevant prudential aspects must be taken into account.
To that end, the Head of the Antitrust Supervisory Commission (Komisi Pengawasan Persaingan Usaha/KPPU) Muhammad Nawir Messi emphasizes that businesses must secure the necessary approval from KPPU. This includes prior consultation with the KPPU so that it can then perform its market analysis.
“The KPPU will then give its recommendation on whether the businesses may or may not conduct a merger,” said Nawir.
Nawir explained that the main concern resulting from mergers is the possibility of market power, collusion, or abuse of dominant market position.
In mitigating those possibilities, KPPU undertakes two analyses, a preliminary analysis followed by a comprehensive analysis. In the preliminary analysis, the KPPU will review whether the merger will likely cause market power, collusion or abuse of dominant position. If this is thought likely, the KPPU will proceed to a comprehensive analysis to consider other relevant issues such as possible changes to market structures or market behavior.
“If the merger has been completed, the merged business must register its details with the Ministry of Law and Human Rights within 30 days. Otherwise, the KPPU will impose a fine of IDR 1billion per day,” said Nawir.
On the other hand, Perdana A Saputro, a business law practitioner, added that in a merger, the most difficult part is the licensing process, either at a central government or regional level. For example, for matters involving regional governments, infrastructure and recourses are problematic.
“This causes a considerably longer time being required. The merger of two businesses may take a minimum of one year. An acquisition will only take 3 to 6 months,” said Perdana.
(hot/kc)
Fitri Novia Heriani, Yanuar Pribadhie
In the commercial world, mergers between companies is a common occurrence. Mergers make sense because companies, by nature, want to expand their market share, enter new markets and obtain skills and information to support the growth and stability of their business.
Although it is common practice, mergers between companies requires attention to a number of considerations. One important consideration, as asserted by Muhammad Nawir Messi, the Chairman of the Business Competition Supervisory Commission (KPPU), is that in certain circumstances companies must secure KPPU approval .
The merger of two or more businesses seems procedurally exhausting. From a legal and regulatory perspective, all relevant prudential aspects must be taken into account.
To that end, the Head of the Antitrust Supervisory Commission (Komisi Pengawasan Persaingan Usaha/KPPU) Muhammad Nawir Messi emphasizes that businesses must secure the necessary approval from KPPU. This includes prior consultation with the KPPU so that it can then perform its market analysis.
“The KPPU will then give its recommendation on whether the businesses may or may not conduct a merger,” said Nawir.
Nawir explained that the main concern resulting from mergers is the possibility of market power, collusion, or abuse of dominant market position.
In mitigating those possibilities, KPPU undertakes two analyses, a preliminary analysis followed by a comprehensive analysis. In the preliminary analysis, the KPPU will review whether the merger will likely cause market power, collusion or abuse of dominant position. If this is thought likely, the KPPU will proceed to a comprehensive analysis to consider other relevant issues such as possible changes to market structures or market behavior.
“If the merger has been completed, the merged business must register its details with the Ministry of Law and Human Rights within 30 days. Otherwise, the KPPU will impose a fine of IDR 1billion per day,” said Nawir.
On the other hand, Perdana A Saputro, a business law practitioner, added that in a merger, the most difficult part is the licensing process, either at a central government or regional level. For example, for matters involving regional governments, infrastructure and recourses are problematic.
“This causes a considerably longer time being required. The merger of two businesses may take a minimum of one year. An acquisition will only take 3 to 6 months,” said Perdana.
(hot/kc)