Indonesia: Getting the deal done

In 2007, Indonesia saw an increase in merger & acquisition (M&A) activity, in particular in the banking and finance and resources sectors, which was driven primarily by the property and resources boom. In 2009, the Indonesian M&A landscape is a different story.

The current global economic and financial crisis has affected emerging market economies, including Indonesia. Worldwide economic decline and the crash of stock markets, including the Indonesia Stock Exchange (IDX), have seriously affected many companies, with some being forced to sell assets to raise capital and service loans. Companies also face difficulties securing loans, as the banking sector tightly holds on to its assets, with the valuation of assets (including target companies) becoming increasingly difficult.

However, the crash of stock prices has also generated some real opportunities for companies looking for growth through M&A. In many instances, target companies that were once out of reach have more recently...