Grab Holdings Ltd. is moving forward with its attempt to take over GoTo Group, according to people familiar with the matter, who said the Singaporean ride and delivery firm has begun due diligence on its Indonesian rival.
Grab has been evaluating GoTo’s accounts, contracts and operations, the people said, asking not to be identified because the companies haven’t announced a deal. Grab, GoTo and their shareholders have also been assessing the potential structure and value of an agreement, the people said.
Talks are ongoing and may not lead to a transaction, the people said.
Grab, which is backed by Uber Technologies Inc., has held on-and-off talks with GoTo, but a merger never materialized, partly because of antitrust concerns likely to arise from combining two dominant Southeast Asian tech companies. Uber left the region in 2018 in exchange for its stake in Grab, and smaller competitors haven’t eaten significantly into Grab and GoTo’s market share.
Shares of GoTo, whose investors include SoftBank Group Corp., rose 5.1% to 83 rupiah (1 cent) in Jakarta while the broader Indonesian stock market plunged the most since 2011 on concerns about a weakening economy. GoTo’s shares are up 19% this year, giving the company a market value of 99 trillion rupiah ($7.98 billion). Grab, with a market capitalisation topping US$18 billion ($23.98 billion), advanced as much as 7.9% in US pre-market trading.
Representatives for Grab and GoTo declined to comment.
Grab is considering a valuation of more than US$7 billion for GoTo, Bloomberg News reported in February, with one scenario being an all-stock purchase at over 100 rupiah a share. Discussions have intensified and the two see 2025 as an opportune year for a deal, people with knowledge of the talks have said.
What Bloomberg Intelligence says
Grab’s possible advance in its pursuit of GoTo — a deal that could fetch more than US$7 billion, according to Bloomberg News — puts it on track for a tough round of regulatory scrutiny. A Grab-GoTo combination would effectively control 60-70% of Southeast Asia’s on-demand services market, with a stronger grip in Indonesia, GoTo’s home base. That, and potential staff cuts, might convince the regulator to block the purchase. A similar ordeal torpedoed Grab’s purchase of taxi operator Trans-cab in Singapore.-Nathan Naidu, analyst
Growth for both Grab and GoTo has cooled dramatically from triple-digit rates as consumers in Southeast Asia curtail spending to cope with elevated inflation and interest rates.
