MERGER

Compiled to Fulfill the Duties of Marketing Management Courses

Lecturer: Prof. Dr. Isti Fadah, M.Si.

Authored By:

Izzah Mariami Sechimil (190810201004)

Redygta Meigy Maulana (190810201153)

DEPARTMENT OF MANAGEMENT
FACULTY OF ECONOMIC AND BUSINESS
UNIVERSITAS JEMBER
2021
 CHAPTER I
INTRODUCTION

Issue Background
Entering the era of free trade, business competition among companies is getting
tougher. Such conditions require companies to always develop corporate strategies in order to
survive or develop more. For that, companies need to develop an appropriate strategy so that
the company can maintain its existence and improve its performance.
As an organization, a company will experience various conditions, namely dynamic
growth and development, being in a static state and experiencing a process of decline or
contraction. In order to grow and develop, a company can expand its business by choosing
one of two alternative paths, namely growth from within the company and growth from
outside the company business combinations can be carried out in various ways based on legal
considerations, taxation, or other reasons. In Indonesia, driven by a growing capital market,
more and more merger transactions are being made. Forms of business combination include
mergers. The reasons for companies to merge are to obtain synergies, strategic opportunities,
increase effectiveness and exploit miss-pricing in the capital market.

Problem Formulation
1. What is a merger?
2. What are the types of mergers?
3. What is the procedure for implementing the merger?
4. What are the restrictions on mergers?

Purpose
1. Know the meaning of a merger
2. Knowing the types of mergers
3. Knowing the merger implementation procedure
4. Know what the restrictions on mergers are
 CHAPTER II
DISCUSSION

Definition of Merger
A merger is a process of diffusion of two companies with one of which remains
standing under the name of the company while the other has disappeared with all of its names
and assets added to the company that remains standing. The prevailing laws and regulations
in Indonesia provide the meaning or definition of merger with almost uniform sentence
formulations. Undang-Undang Nomor 40 Tahun 2007 Tentang Perseroan Terbatas (UUPT)
use the term "merger" instead of the term "merger". The Company Law provides the meaning
of a merger is a legal action taken by two or more companies to merge by establishing a new
Company which due to the law obtains assets and liabilities from the merging Company, due
to the law, the company that accepts the merger and subsequently the status of the legal entity
of the merging Company self ends because of the law. The definition of the combination is
then specifically mentioned in Peraturan Pemerintah Nomor 27 Tahun 1998 tanggal 24
Februari 1998 mengenai Penggabungan, Peleburan, dan Pengambilalihan Perseroan Terbatas.

Types of Mergers
1. Horizontal Merger, is a merger carried out by a similar business (same business), for
example a merger between two bakery companies, a shoe company merger, a cotton
company merger. For example PT "A" which operates cotton, joins with PT "B"
which operates spinning, joins with PT "C" which operates fabrics and so on. Thus,
the purpose of the cooperation here is to ensure the availability of supply or sales and
distribution, where PT "B" will use PT "B" products and so on.
2. Vertical merger is a merger that occurs between companies that are interconnected,
for example in successive production flows. For example: a yarn spinning company
merges with a cloth company, a tire company merges with a car company. Example:
PT. A, PT. B, PT. C joined, then PT B became the holding company.
3. Conglomerate merger is a merger between various companies that produce a variety
of different and unrelated products, for example a shoe company merging with an
electronics company, or a car company merging with a food company. The main goal
of a conglomerate is to achieve rapid business growth and get better results. The trick
is to exchange shares between the two companies that are put together.
Prosedur Pelaksanaan Merger
Provisions regarding the procedure for implementing this Merger are regulated in
UUPT No. 40 Tahun 2007 Pasal 122 until Pasal 133. The procedures for its implementation
are described as follows:
1. The Board of Directors of the Company who will merge and accept the merger
formulate the composition of the merger and must obtain the approval of the Board of
Commissioners of each Company, then submitted to the respective GMS for approval.
2. Certain companies that are intending to merge need to obtain prior approval from the
relevant agencies in accordance with the statutory provisions.
3. The merger of Companies must consider the interests of:
a) the Company, minority shareholders, employees of the Company;
b) Creditors and other business partners of the Company; and
c) Society and healthy competition in doing business.
4. Shareholders who do not agree with the resolution of the GMS regarding the merger
as referred to above may only exercise their right to ask the Company to purchase
their shares at a fair price.
5. The resolution of the GMS regarding the merger of Companies must meet the
predetermined quorum number.
6. The Board of Directors of the merging Company must announce a summary of the
draft in at least 1 (one) Newspaper and announce in writing to the employees of the
merging Company no later than 30 (thirty) days prior to the invitation to the GMS.
The announcement also contains a notification that interested parties can obtain the
plan for merger at the Company's office from the date of the announcement until the
date the GMS is held.
7. The merger plan that has been approved by the GMS is recorded in a deed of merger
made before a notary in Indonesian.
8. If the merger of Companies is not accompanied by an 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.
9. The Board of Directors of the Company accepting the merger must announce the
results of the merger in 1 (one) Newspaper or more within 30 (thirty) days from the
date the merger takes effect.

Prohibition on Mergers
 Wrong in conducting a merger, entrepreneurs can be brought to court on charges of
monopolizing and unfair business competition. If according to Komisi Pengawas Persaingan
Usaha (KPPU), a business actor can be proven to have violated the regulations regarding
monopoly and unfair business competition, then the business actor may be subject to
sanctions in the form of administrative sanctions to criminal sanctions. Based on pasal 2 PP
57/2010 explained that:
1. Business actors are prohibited from merging business entities, consolidating business
entities, or taking over shares of other companies which may result in monopolistic
practices and / or unfair business competition.
2. Monopolistic practices and / or unfair business competition occur when a business
entity resulting from a merger, consolidation or business actor taking over the shares
of another company is suspected of having committed:
a) Prohibited agreements. Such as oligopoly practices, price fixing, zoning,
boycotts, cartels, trusts, oligopsony practices, vertical integration, closed
agreements.
b) Prohibited activities. Such as monopolistic practices, monopsony practices,
market control, conspiracy.
c) Abuse of dominant position, namely a situation where the business actor
has no significant competitors in the relevant market in relation to the
controlled market share, or the business actor has the highest position among
its competitors in the relevant market in terms of financial capacity, ability to
access supply or sales and the ability to adjust the supply or demand for
certain goods or services.
 CHAPTER III
CLOSING

Conclusion
Merger is the merger of two companies into one, where the merged company takes /
buys all the assets and liabilities of the merged company so that the merged company owns at
least 50% of the shares and the merged company stops operating and its shareholders. receive
some cash or shares in the new company. Another definition of a merger is the absorption of
a company by another company. In this case the buying company will continue its name and
identity. The buying company will also take both the assets and liabilities of the purchased
company. After the merger, the company purchased will lose / stop operating.
In conducting a merger, companies must overcome many obstacles, namely capital,
labor, and corporate culture. To unite the two companies with different cultures, of course, is
very difficult and one must choose which culture is suitable to be used in carrying out
mergers and acquisitions. Before undertaking a merger and acquisition of these two
companies, one must coordinate with employee representatives from each company regarding
steps or policies that the company will take later after the merger. Because corporate culture
is a very difficult thing to change, this change needs to be done gradually.
References:
Umam, Khotibul, Trend Pembentukan Bank Umum Syariah, 2009, Yogyakarta:
BPFE Yogyakarta
Naihasy, Syahrin, Hukum Bisnis (Business Low), 2005, Yogyakarta: Mida Pustaka
Bryan A. Gorner, Black’s Law Dictionary, 2004,, USA: St. Paul