THEINDODAILY.COM – The merger and acquisition (M&A) activities in Indonesia have demonstrated remarkable strength and stability amidst global economic volatility, despite experiencing a slight decline over the past year. This positive trend is projected to continue this year.
Indonesia’s ability to navigate external pressures while maintaining a robust M&A market underscores its appeal as a Southeast Asian investment hub within the global business landscape.
“Indonesia’s M&A stability and growth throughout 2023 have seen a sector dominance shift, reflecting the global economic conditions’ impact on business sustainability and technological advancement,” CEO of Protemus Capital Wiljadi Tan said on Wednesday (28/2).
He made the above statement during during the presentation of the research findings ‘The Asia-Pacific M&A Odyssey: Shaping Factors & Strategic Moves (2019-2023)’ in Jakarta.
Protemus Capital is an M&A consultancy firm specializing in mergers and acquisitions with an independent international network and affiliation with the Geneva Capital Group (GCG).
Wiljadi further said that Protemus Capital has observed a significant transition from the telecommunications sector, which dominated M&A targets during the pandemic, to the energy and materials sectors, now leading in M&A transaction value.
“This shift aligns with Indonesia’s focus on green energy initiatives – the proliferation of geothermal energy and natural resources (Lithium, Cobalt, and Nickel) as raw materials for Electric Vehicles (EV) batteries, indicating Indonesia’s strategic economic position on the global stage,” said Wiljadi Tan.
According to Wiljadi, the energy sector, crucial for both Indonesia and the global market, dominated Indonesia’s M&A activities throughout 2023. Substantial reserves and efforts to develop energy infrastructure have positioned it as a focal point in leveraging energy reserves, responding to energy demand, and attracting global investors.
In the financial sector, Wiljadi noted, based on data records, M&A transactions have remained stable amidst ongoing consolidation efforts while leveraging new technologies. Advances in FinTech (financial technology), InsurTech (insurance technology), and digital banking expansion indicate steady yet innovative growth.
This trend demonstrates the Indonesian financial sector’s adaptability and potential in driving economic growth and efforts to integrate into the global financial system.
M&A Set to Rise
Protemus Capital continues to forecast an increase in M&A activities within the financial sector in Indonesia throughout this year, he added.
Specifically, for this year, Protemus Capital believes M&A transactions will remain focused on the energy sector, related to green energy and technological advancements in the financial sector.
Protemus Capital predicts a potential 20% growth in M&A activities in the energy and materials sectors, reaching US$ 2,137 million in 2023 from US$1,781 million in the previous year.
“We also foresee further consolidation in the telecommunications sector, for example, with the planned merger of Smartfren and XL Axiata, as well as an increase in business consolidations among telecommunications players through FMC (Fixed Mobile Convergence) and the expansion of FTTH (Fiber-To-The-Home),” explained Wiljadi Tan.
Throughout 2023, Protemus Capital was involved in M&A activities in Indonesia, with transaction values around US$125 million, primarily in the Technology, Media, and Telecommunications sectors. (RK)