KUALA LUMPUR – Grab Holdings and GoTo Group are stepping up merger negotiations, aiming to reach a deal within this year as both companies look to end years of losses in Southeast Asia’s highly competitive online market.
According to Bloomberg, the potential merger could value the companies at over US$7bil (RM31bil). One scenario under discussion is an all-stock transaction that would price GoTo’s shares at more than 100 rupiah (RM0.027) each, marking a 20% premium over the current stock value.
Sources close to the situation say talks have gained momentum in recent weeks, with 2025 seen as a favourable year for a deal. The two companies, the largest ride-hailing providers in the region, have been in negotiations for years, considering a merger that could help reduce operational costs and alleviate competitive pressure in a market of over 650 million consumers.
Grab, based in Singapore and backed by Uber Technologies, and Indonesia’s GoTo, which has investors including SoftBank Group, have made strides towards profitability since their stock-market listings. However, intense competition for users has kept prices low and squeezed profit margins.
In previous years, discussions on a merger have stalled due to disagreements between the parties and potential antitrust concerns, especially in markets such as Indonesia and Singapore. Sources caution that the current talks may not result in an agreement, speaking on condition of anonymity as the matter remains confidential.
A spokesperson for GoTo declined to comment, and Grab representatives did not provide immediate feedback when approached by Bloomberg News. DealStreetAsia had earlier reported that the companies aim to finalise a deal within this year.
Last year, VinFast entered into a memorandum of understanding with Gojek to supply electric vehicles in Indonesia. However, with little progress made, VinFast opted to launch its own electric vehicle initiative, Xanh SM, independently.
On February 4, 2025, GoTo’s shares rose as much as 6.2% in Jakarta, bringing its year-to-date gain to over 20%. In contrast, Grab’s shares have fallen by approximately 4 per cent in New York this year. Together, the two companies are valued at close to US$25 billion (RM111bil), rivaling some of South-east Asia’s largest firms.
Amid merger discussions, both companies have also pursued smaller deals to bolster their finances. Grab acquired a supermarket chain in Malaysia and a reservation platform in Singapore, while GoTo relinquished control of its unprofitable e-commerce division to ByteDance’s TikTok in a US$1.5bil (RM6.6bil) deal last year.
However, their growth has significantly slowed from the triple-digit rates seen in previous years. As customers in the region cut back spending due to high inflation and rising interest rates, demand has been growing at a more modest pace. Consumers are now less inclined to use ride-hailing or food delivery services in the current challenging economic environment. – February 4, 2025