Indonesian regulatory roadblocks stall Grab's US$7b mega play for GoTo, sources say

Malay Mail

19-06-2025

SINGAPORE, June 19 — Singapore-based Grab's plan to acquire Indonesia's GoTo to create a dominant South-east Asian ride hailing and food delivery company has run into regulatory hurdles, three sources said, casting a cloud over a potential deal.
Reuters reported in May Nasdaq-listed Grab was looking to strike a deal to buy smaller rival GoTo in the second quarter and had hired advisers to work on the proposed acquisition. A deal could value GoTo at around US$7 billion (RM29.8 billion).
The two companies now need more time to agree on a deal after the Indonesian government proposed some conditions for the plan to go through, said the three sources, who have knowledge of the deal discussions.
The Indonesian government is examining how the potential merger would impact job welfare and market competition in South-east Asia's biggest and most populated economy, said two of the sources.
In May, hundreds of ride-hailing drivers and riders joined protests in several cities across Indonesia over low wages and to oppose a Grab-GoTo merger, fearing the creation of a monopoly that would lead to job cuts and raise prices for consumers.
The government also wants the merged entity to guarantee more benefits, such as better fees and bonuses to riders and drivers, said one of the sources, who did not wish to be identified as the deal talks are confidential.
Grab said last week it stood by its previous statement that it was not involved in any discussions for a potential transaction with GoTo and has not entered into any definitive agreements.
Separately, Grab also raised US$1.5 billion in a convertible notes offer, citing acquisitions among the capital's intended uses.
GoTo, which is trading at a valuation of US$4.4 billion, referred Reuters to its previous regulatory disclosures that there has been no agreement with any party about a potential transaction.
Indonesia's transport ministry declined to comment.
Optimising operations
GoTo is 73.90 per cent-owned by foreign investors, including SoftBank Group and Taobao China Holding, a unit of China's Alibaba Group, with the rest owned by Indonesian investors, according to its 2024 annual report.
SoftBank's SVF GT Subco (Singapore) Pte Ltd and Taobao are GoTo's top two shareholders, holding 7.65 per cent and 7.43 per cent stakes, respectively, the report showed.
When asked to comment on a potential deal involving GoTo and Grab, Sufmi Dasco Ahmad, the deputy speaker of the Indonesian parliament, told Reuters the government wants GoTo to be majority-owned by Indonesians.
Dasco, who is also a senior member of Indonesia President Prabowo Subianto's ruling party, did not detail how GoTo can be majority-owned by Indonesians. He also did not comment on any conditions the government has set for the potential merger.
Deputy Indonesian manpower minister Immanuel Ebenezer, whose agency oversees employment, said he has no information on any conditions set for a Grab-GoTo merger.
A merger would enable the two companies, which, according to LSEG data, have been posting annual net losses since their IPOs, to cut costs by optimising operations.
Grab, with a current market value of about US$19 billion, is currently worth about half the US$40 billion when it merged with a blank-check company to list on the Nasdaq in December 2021. — Reuters