Since the beginning of the year, the merger issue between Gojek and Tokopedia has been getting stronger.
The merger process is even rumored to have entered the stage of signing a
The merger of these two companies will certainly create the largest unicorn company in Indonesia that controls various sectors from transportation, food and goods delivery, digital payments, to
If realized, the transaction is considered to be the largest transaction in the Indonesian technology industry.
The existence of a merger not only has an impact on changes in shareholders but also has legal consequences.
To find out what a merger is, its consequences, and how a merger is conducted in Indonesia, Kontrak Hukum will provide the answers below.
Merger at a Glance
According to Article 109 number 1 of Law No. 11 of 2020 on Job Creation, merger is a legal action carried out by one or more companies to merge with another existing company.
The merger results in the assets and liabilities of the merging company transferring by operation of law to the surviving company.
This means that the merged company will end its status by law.
Even though the company’s status will be terminated, the merging company does not need to conduct liquidation (an action to clean up the company’s assets and liabilities) first.
This is because the assets and liabilities of the merging company are transferred by law to the surviving company.
In addition, the shareholders of the merging company will also change into shareholders of the surviving company.
Before the merger is carried out, the boards of directors of the companies that will merge and the surviving company must first prepare a merger plan.
The merger plan contains at least :
- The name and domicile of each company that will conduct the merger.
- Reasons and explanations from the board of directors of the company that will conduct the merger and the terms of the merger.
- Procedures for valuation and conversion of shares of the merging company to shares of the surviving company
- Draft amendments to the articles of association of the surviving company, if any.
- Financial statements covering the last 3 financial years of each company to be merged.
- Plans for the continuation or termination of the business activities of the Company that will conduct the merger.
- The pro forma balance sheet of the surviving company in accordance with generally accepted accounting principles in Indonesia.
- How to resolve the status, rights and obligations of members of the board of directors, board of commissioners and employees of the company that will conduct the merger.
- How to settle the rights and obligations of the company that will merge with third parties.
- How to resolve the rights of shareholders who disagree with the merger.
- The names of the members of the board of directors and the board of commissioners as well as the salary, honorarium and allowances for the members of the board of directors and the board of commissioners of the surviving company.
- Estimated period of implementation of the merger
- Report on the condition, development, and results achieved by each company that will merge.
- The main activities of each merging company and the changes that occurred during the current financial year.
- Details of issues arising during the current financial year that affect the activities of the company to be merged.
If the merger plan has been approved by the board of commissioners of each company, the plan is then submitted to the respective General Meeting of Shareholders (GMS) for approval.
The above merger provisions do not only apply to Closed PTs but also to Public PTs.
The difference is that the merger plan for Public Listed PTs must also contain the opinion of a legal consultant regarding the legal aspects of the merger, an explanation of the benefits and risks that may arise as a result of the merger along with mitigation of these risks and future business plans, as well as information disclosure to the public.
The merger plan is then submitted first to the Financial Services Authority (OJK).
The company conducting the merger is required to publish a summary of the plan in at least one daily newspaper in Indonesian language, the stock exchange website and the website for publicly listed companies, and in writing to the employees of the company conducting the merger prior to the GMS.
If the GMS has approved the merger and there is no objection from creditors, the merger plan that has been approved in the GMS may be set forth in a deed of merger made before a notary in the Indonesian language.
If the merger is not accompanied by any amendment to the articles of association, a copy of the deed of merger must be submitted to the minister to be recorded in the register of companies.
If there is an amendment, a copy can be attached to the application for approval or notification of amendment to the articles of association.
The minister will then record the end of the company’s legal entity status and remove the name of the merged company from the company register.
After the merger occurs, the management/direction of the company that receives the merger is obliged to announce the results of the merger in one or more newspapers within a period of no later than 30 days from the effective date of the merger.
If the merger between Gojek and Tokopedia is carried out, it is likely that Tokopedia will merge into Gojek.
This is because Gojek’s valuation of around 10.5 billion dollars is greater than Tokopedia which has a valuation of around 7.5 billion dollars.
So, this merger will probably result in Tokopedia having to end its status as a legal entity and the two companies merging into Gojek.
Read also: Gojek and Tokopedia Officially Merged into GoTo!
KH Contact
Well Friend KH, those are the rules and consequences when a company merger occurs.
If you have any questions about mergers, the legality of PT and business entities in Indonesia, or other legal issues, don’t hesitate to contact Kontrak Hukum at the
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