Regulatory officials approve a merger of Tri Polyta Indonesia and Chandra Asri

27-Oct-10

Tri Polyta Indonesia and Chandra Asri will merge, will adopt the name Chandra Asri Petrochemicalas. Regulatory officials have approved this merger of Tri Polyta Indonesia and Chandra Asri. The KPPU had agreed that the company resulting from the merger would not be subject to KPPU regulations. The merger is expected to become official on Jan. 1, 2011 and will create Indonesia’s largest petrochemical company. The merged entity is expected to post annual sales of more than Rp 17 trillion a year. Tri Polyta produces 360,000 tpa of polypropylene, Chandra Asri produces 600,000 tpa of propylene, ethylene and polyethylene. According to government regulations, any merger or consolidation of business entities which may result in a monopoly must first be evaluated by the KPPU. Anis Baridwan, the head of surveillance for real sector firms at the Financial Institution Supervisory Agency, said there were no problems and that the merger could proceed as planned. Both companies are subsidiaries of Barito Pacific, and the merger will be ratified at an extraordinary general meeting this week. The Business Competition Supervisory Commission (KPPU) also signed off on the merger on Sept. 30. It understood that [Chandra Asri Petrochemical] is a vertical merger between affiliated companies and therefore exempt from the rules requiring companies to report to the KPPU. Also this merger will not result in monopolistic practices in the petrochemical sector.