Indonesia’s sovereign wealth fund Danantara is considering a role in Grab Holdings Ltd.’s planned US$7 billion ($9.01 billion) acquisition of GoTo Group, potentially allowing the country’s government to own a slice of an Asian internet powerhouse.
Danantara has started preliminary discussions with GoTo to acquire a minority stake in a combined entity, according to people familiar with the matter. That could help assuage concerns in the Indonesian government resulting from the sale of a national tech champion to Singapore’s Grab, the people said.
Grab and GoTo have made headway on a potential deal structure, but the pace of talks had slowed recently over concerns about potential regulatory demands, the people said, asking not to be identified discussing a transaction in flux. Indonesia’s antitrust agency said in May it would look into potential risks and urged the companies to ensure any deal won’t create a monopoly.
Danantara’s participation would boost the chances of the companies obtaining clearance from Indonesia’s government, likely the biggest regulatory hurdle for a deal. Still, the discussions with Danantara are at an early stage and may not lead to a transaction, the people said. It’s also unclear if the fund has held talks with Grab.
Spokespeople for Grab, GoTo and Danantara declined to comment.
Grab, which is backed by Uber Technologies Inc., has held on-and-off talks with GoTo for years. But a merger never materialised, partly because of antitrust concerns likely to arise from combining Southeast Asia’s two dominant ride-hailing and food-delivery companies. Uber left the region in 2018 in exchange for a stake in Grab, and smaller competitors haven’t eaten significantly into Grab and GoTo’s market share in Indonesia and Singapore.
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A potential sale of GoTo has sparked worries among Indonesia’s political leadership about the loss of independence and developer and engineer jobs, the people said. Some have also expressed concerns that ride-hailing and food-delivery prices would rise if Grab becomes dominant in a tough economy where consumers are already facing hardship, they said.
One way to soothe such concerns is for Grab to agree to not reduce jobs for a period of time, one of the people said.
Meanwhile, the Indonesian government is grappling with a market spooked by the populist policies of President Prabowo Subianto. Since taking over late last year, the 73-year-old ex-general has raised the minimum wage, boosted spending on consumer subsidies, diluted the central bank’s independence and taken an aggressive stance against foreign businesses like Apple Inc. In March, he ordered Grab and GoTo to give holiday bonuses to drivers.
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Grab is considering a valuation of more than US$7 billion for GoTo, Bloomberg News reported in February, with one option being an all-stock purchase at about 100 rupiah a share. Shares of GoTo closed at 61 rupiah on Thursday.
One scenario being discussed is for GoTo to first buy Grab’s Indonesian ride-hailing and food delivery business. Following that, Singapore-based Grab would buy a majority stake in this combination, allowing it to run GoTo’s operations in Indonesia, the people said. In this scenario, GoTo would sell its ride-hailing business in Singapore to another buyer, the people said.
Grab, the largest of Southeast Asia’s ride-hailing and delivery firms, has been locked in fierce competition with GoTo for almost a decade across Southeast Asia. The Singaporean company is the leading provider in its home market and countries including Malaysia and Thailand.
GoTo has pulled out from countries including Thailand and Vietnam after a fierce cost-cutting drive, but remains a formidable player in Indonesia — the region’s biggest market. Acquiring GoTo would give Grab a stronger position in the country of more than 275 million.
Newer contenders like InDrive and Maxim are also targeting Indonesia, where more people are buying food online and booking transport through their phones. Grab posted a 6.3% increase in revenue to US$643 million for its Indonesia business in 2024, its slowest-growing geography in Southeast Asia.
— With assistance from Yoolim Lee
