The inauguration of the elected president is still awaiting mid-October 2024. After that, the new cabinet ministers will be announced. In less than a month, all business players will have a clearer picture of Indonesia's economic direction moving forward. The elected president has promised a smooth transition and to continue the pro-business policies of President Jokowi.

Meanwhile, Indonesian economic indicators continue to show solid performance. Economic growth was recorded at 5.08% year-on-year (yoy) in the first half of 2024, while inflation remained controlled at 2.12% yoy in August 2024. The relatively benign inflation allowed Bank Indonesia to lower its policy rate by 25 basis points (bps) on 18 September 2024, to 6.0%. This policy aligns with the Fed which also cut its rates by 50 bps on 19 September 2024.

Despite the generally positive economic outlook, political considerations still dominate business decisions, particularly those involving significant time and resources, which could have a major impact on the company’s future growth. This is reflected in the many companies adopting a 'wait and see' attitude. However, optimistic companies continue to move forward amidst domestic and global uncertainties. Their confidence in the resilience of Indonesia's economy encourages them to take initial steps and carefully prepare strategies, aiming to accelerate and capitalize on the expected continued economic growth momentum.

M&A process, how long will it take?

To navigate the lengthy M&A process effectively, it's essential to prepare in advance. This allows for prompt execution when the economic outlook stabilizes. In the article "A Blueprint for M&A Success," McKinsey emphasizes the importance of the "Why" and "Where" elements before implementing an M&A strategy. Defining the reasons and objectives of the M&A, along with existing constraints, requires a comprehensive understanding of the company’s current conditions, corporate strategy, and exploring potential avenues for business growth.

Clearly outlining the objectives of the M&A and how they align with the company's overall strategy is a key factor in ensuring M&A success. Defining these objectives as an initial step often takes time, as specific business metrics are needed to evaluate the company and identify available opportunities. Mandiri Sekuritas' Advisory Team will assist companies in better understanding their current situation and refining the “why” element to ensure the M&A process proceeds as expected.

Once the objectives are clearly defined and aligned with the company’s vision and mission, the next phase is the "how"—that is, how to implement the M&A plan. Depending on the scale and needs, preliminary due diligence is usually conducted on the target company, followed by a more comprehensive due diligence process and deal structuring. This stage often takes time before moving on to negotiations and the formulation of valuation. The M&A process concludes with legal proceedings and documentation.

Stay Ahead of the Curve by Starting Early

While the M&A process may appear straightforward, complications at each stage often consume significant time and energy. This process can be greatly simplified with the assistance of the experienced Mandiri Sekuritas team. Not only will they guide you through the early stages, such as defining objectives and identifying target companies for the M&A, but they will also provide valuable insights into the macroeconomic outlook and the company’s position within a dynamic business environment.

Ready to pursue an M&A strategy? Should you wait or move forward?

The choice is yours. Even if M&A eventually proves not to be the best strategic option, the evaluation of your company's strengths and weaknesses will serve as a valuable foundation to move forward and emerge as a leader in your field.

Liaise with Mandiri Sekuritas to accelerate your growth.