What are some of the trends you have seen in Indonesia’s banking scene when it comes to M&A and consolidation?
In comparison to a few years ago, 2018 and 2019 seem a bit more active. Not as active as other industries because banks are heavily regulated under Indonesian law, but compared to a few years back, we have seen the market grow more active. For example, the completion of the acquisition of Danamon by MUFG, and the subsequent merge between Danamon and Bank Nusantara Parahyangan on 1 May 2019. That was one of the biggest M&As of Indonesia last year, in terms of size and significance, because both companies are public, so there was a lot of legal discussion there too.

What are the regulatory challenges foreign investors are facing?
Regulations for mergers and acquisitions are quite clear in Indonesia, both for private and public companies; in our office we can help clients with three or four acquisitions plan in one month. One common issue is the government policies which may not immediately apparent on the face of the regulation which can sometimes cause confusion. But I think that’s the role of a strong local legal counsel; to bridge communication and to structure transactions and advise clients of the reality in practice.

How are you as a firm helping to overcome them?
As a local counsel we have two main roles. The first role is advising clients to meet all the regulatory requirements, advising them on regulatory risk on the merger and acquisition side, and on preparing reports for the government authorities. We also advise clients of the practical issues that may not be obvious. This requires strong experience from a local legal counsel. Experience and knowledge of practices are equally important to knowledge of regulations. Also, 90 percent of our clients are foreign investors, so in most cases we deal with their local partners in Indonesia, this is where the second role comes into place where we often have to bridge negotiations between our clients and the local partners, not only about regulation, but also about the culture of negotiations (including language barrier) as to help both parties to achieve their goals, so I think this second role is equally as important.