Tuesday, March 9, 2021

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(1st of March) Indonesia Competition Commission (ICC) has relaxed the notification of merger and acquisition by approving the application for relaxation on the delayed notification filed by Jebsen & Jessen Packaging (S) Pte. Ltd. (J&J) for the acquisition of shares of PT Indo Tirta Abadi. This has been based on Regulation of ICC No. 3 Year 2020 regarding Relaxation of Law Enforcement of Monopolistic Practices and Unfair Business Competition as well as Supervision of the Implementation of Partnerships in the context of Supporting the National Economic Recovery Program. Upon the implementation of the relaxation, ICC, through a Commission Meeting held on February 27, 2021, concluded not to continue the pre-investigation process on the alleged delayed notification by J&J.

The relaxation stemmed from the notification of acquisition conducted by J&J, a Singaporean company that produces protective packages and EGS Geofoam, for the acquisition of shares of PT Indo Tirta Abadi, an Indonesian manufacturer that produces products from rubber and plastics (including for packaging purposes). J&J became the largest shareholder of PT Indo Tirta Abadi through such transaction. The acquisition transaction was conducted through a share sale and purchase agreement on January 31, 2020 and came into effect as of March 10, 2020. With due observance of Government Regulation No. 57/2010 regarding Mergers, Consolidations, or Acquisitions of Shares of Other Companies (Government Regulation 57/2010), if the transaction meets a certain amount limit, it must be notified to ICC by no later than 30 (thirty) business days as from the date the transaction takes effect, namely May 14, 2020. However, the transaction was just notified by J&J on May 20, 2020 or a 4 busines-day delay in notification, so that ICC began to pre-investigate such delay.

During the pre-investigation process, ICC issued a Commission Regulation on Relaxation on November 9, 2020, one of the points of which provided for the notification obligation, namely ICC shall relax law enforcement in the form of the extension of the time for the calculation of notification obligation to 60 (sixty) business days as of the effectively coming into force of the transaction. Based on such Regulation and with due observance of the application of J&J, ICC held discussions through the Commission Meetings to determine if the Commission Regulation on Relaxation would be applied to the ongoing pre-investigation process on the delay in transaction notification conducted prior to the issuance of the Commission Regulation on Relaxation. Article 10 of Regulation of ICC No. 3 Year 2020 states that “At the time this Commission Regulation comes into force: c. Delayed Notification of a Merger, Consolidation, or Acquisition of shares and/or assets of a Company that is currently ongoing and has yet to enter the Commission Panel Hearing, the provisions of the Commission Regulation in favor of the Business Actor will apply.” Based on the above, the Commission Meeting has decided that the application for the relaxation of law enforcement filed by J&J be approved.