GoTo Denies Merger Talks with Grab Holdings
GoTo has denied reports of a potential merger with Grab Holdings, highlighting the absence of any agreement. While a merger could improve profitability, regulatory challenges remain.
GoTo has denied news reports regarding discussions of a potential merger with the Singapore-based rival Grab Holdings, emphasizing that no agreements exist. In a statement to the Indonesia Stock Exchange, the company stated, "There is no agreement between the company and any party to enter into a merger transaction of the type that had been reported in the mass media." They noted that similar reports had surfaced in previous years, which were based on speculation.
Following the announcements, shares of GoTo fell 3.4% in Jakarta trading after a previous rise of 7.4%. Conversely, Nasdaq-listed Grab experienced a boost of 12.6% in New York trading after reports that it is considering a takeover of GoTo, valued at over $7 billion.
Analysts suggest that while a merger could hasten profitability for the two struggling companies, obtaining regulatory approval poses significant challenges. Hendra Wardana, founder of the Indonesian research firm Stocknow.id, commented, "This merger will create a stronger technology giant in Southeast Asia, reduce direct competition, and increase operational efficiency." However, he highlighted that antitrust regulations and corporate culture integration present major risks.
In its efforts to achieve profitability, GoTo is restructuring operations and had previously agreed in December 2023 to merge its e-commerce division, Tokopedia, with ByteDance's TikTok Shop Indonesia. This merger will result in TikTok becoming the controlling shareholder of the joint venture with an investment of $1.5 billion.
