chapter  3
Conglomerates in Indonesia: The road to power and beyond
Pages 21

Every Indonesian knows the kretek cigarette brand Djie Sam Soe of the Sampoerna Company, but few may realise that the country’s second largest tobacco manufacturer is one of the oldest Indonesian conglomerates in existence, and that it recently was targeted for international takeover. In March 2005, Philip Morris purchased 40 per cent of Sampoerna’s equity with the intention of bidding for additional shares in order to acquire majority ownership, leaving only a 5 per cent stake for the descendants of the founding father Liem Seng Tee. Fears were immediately voiced that Sampoerna would then ‘go private’, meaning that it would withdraw from trading and shareholder control at the Jakarta Stock Exchange (Kompas 15 March 2005). Sampoerna illustrates a number of features characteristic of conglomerates in Indonesia, including long-standing tradition, family ownership, economic power held by Indonesian businessmen of Chinese descent and, finally, being highly attractive for takeover once success in the domestic market has been demonstrated.