Indonesia's Mergers and Acquisitions Grew 26% in 2016

The value of merger and acquisition activity in 2016 grew by 25.78 percent to US$1.98 billion, or the equivalent of Rp26.28 trillion at an exchange rate of Rp13,300 per US dollar. This value comprises mergers and acquisitions originating from domestic investment worth US$1.08 billion and from foreign sources amounting to US$893 million.

According to Bank Indonesia's 2016 Indonesian Economic Report, the value of domestic mergers and acquisitions in 2016 surged 453 percent from the previous year, when it was only US$196 million. Meanwhile, mergers and acquisitions from and to foreign countries in 2016 actually decreased by 35 percent from the previous year, amounting to US$1.38 billion. The slowdown in the global economy, impacting the domestic economy, caused foreign investment to slow down last year.

Investment in 2017 is expected to improve as corporate financial consolidation ends. This can be seen from the increased value of merger and acquisition transactions in 2016. The increase in merger and acquisition investment indicates an improvement in the confidence of business actors in expanding their businesses in the following year. In addition, the government's monetary easing policy, which is expected to continue, also provides a stimulus for corporations to expand.