Document background
A Letter Of Intent Merger is a crucial preliminary document used in the early stages of merger negotiations in Indonesia. It is typically prepared when two or more companies have identified potential synergies and wish to formally express their intention to explore a merger, while maintaining flexibility before committing to a definitive agreement. The document operates under Indonesian law, particularly Law No. 40 of 2007 and related regulations, and typically includes key commercial terms, proposed transaction structure, valuation parameters, exclusivity provisions, and confidentiality obligations. While most provisions are non-binding, certain aspects can be made binding if specifically agreed. This document serves as a roadmap for the transaction and is often required by boards, shareholders, and regulators to demonstrate serious intent before proceeding with detailed due diligence and definitive agreements.
