Dahlan suspends PGN, Pertagas merger talks

State Minister of State Owned Enterprises Dahlan Iskan said that he would suspend the ongoing discussions on the proposed merger of state-controlled gas distribution firm PT Perusahaan Gas Negara Tbk (PGN) and PT Pertamina Gas (Pertagas), a subsidiary of state-owned oil and gas firm PT Pertamina.

He said on Tuesday that the merger talks ?have disturbed all parties,? because the plan has been leaked to the press. He declined to provide details.

The government reportedly in January approved the proposed merger under which PGN would be acquired by Pertagas.

The decision for the merger was made during a meeting between State Minister of State Owned Enterprises Dahlan Iskan and top officials of Pertamina on January 7, 2014. According to minutes of the meeting, the newly merged company will become a subsidiary of PT Pertamina.

Under the merger plan, Pertamina will own 30-38 percent shares in the new company, the government to get 36-40 percent shares, and the public investors in IDX-listed firm PGN to get 26-30 percent shares.

Pertamina Commissioner M. Yasin said in January that the merger process was expected to take about eight months to complete. (*)