Understanding Merger and Acquisition
Mergers and acquisitions (M&A) are business strategies that companies use to expand operations, strengthen market positions or improve efficiency. In an increasingly competitive global context, M&A is often a way for companies to grow significantly, either by joining forces with other companies (mergers) or taking ownership of other companies (acquisitions). This process not only includes financial aspects, but also involves managing cultural change, operational synergies, and technology integration.
According to the Limited Liability Company Law Article 1 point 9, Merger can be defined as a legal action taken by one or more companies to merge with another existing company which results in the assets and liabilities of the merging company being transferred to the surviving company and subsequently the legal entity status of the merging company ends by operation of law.
Meanwhile, Acquisition based on UU PT Article 1 point 11 is a legal action carried out by a legal entity or individual to take over the shares of a Company which results in the transfer of control over the Company.
In general, mergers and acquisitions can be divided into 2 categories, namely related and unrelated, where the difference lies in the products/services offered, whether they are still related (for example: logging companies with furniture companies) or there is no relationship at all (for example: food companies merging with furniture companies). The two categories themselves are still divided into several types where there are 2 types in the related category, namely vertically related and horizontally related. This vertical relationship refers to the merger acquisition process of two upstream and downstream companies where there is a merger between the producer/supplier and distributor or distributor and retailer/seller (example: Merck and Merco). Meanwhile, a horizontal relationship occurs when the merger involves competing companies (e.g. Exxon and Mobil).
In Indonesia, M&A under the Limited Liability Company Law goes through several stages including:
- fulfilling the requirements of the M&A;
- drafting the M&A;
- the M&A is approved by the General Meeting of Shareholders (GMS);
- drafting the M&A deed; and
- announcing the results of the M&A.
For more detailed information, please do not hesitate to contact us below:
| : | justicia@justicia.attorney | |
| Telepon | : | +62 21-31182771 |
| Website | : | www.justicia.attorney |
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