After a report that it is considering a potential merger with Grab, Gojek denied that it is planning a deal with its rival, but a source tells TechCrunch that the two companies have been talking for about three and a half months, beginning after Gojek founder and former CEO left the company in October to join Indonesian president Joao Widodo’s cabinet.
After the Information reported that the two companies are in merger discussions, a Gojek spokesperson told TechCrunch that “there are no plans for any sort of merger, and recent media reports regarding discussions of this nature are not accurate.” A Grab representative, meanwhile, said that the company declines to comment on market rumors and speculation.
But a merger is one possible solution to the costly rivalry being waged by the two companies in Southeast Asia and the statements may be an effort to ward off attention before a deal nears completion.
With a $14 billion valuation and investors including SoftBank, Uber and Didi Chuxing, Grab is the larger company, but it competes head-to-head in Indonesia with Gojek, which has financial backing from Tencent, Google and Visa, among others. Both companies offer a wide range of services, including ride-hailing, food deliveries and payments, through their apps. (Grab said today that it has raised $850 million to expand its financial services).
According to the Information, executives from Gojek and Grab have met occasionally over the past several years, and began to discuss a merger more seriously recently. But the two disagree over the business’ valuation and how control of the combined company would be split, with Grab telling its major investors that Gojek wants its shareholders to hold 50% of its combined Indonesian operations, and wish to avoid Gojek’s operations getting absorbed by Grab.
If they agree to merge, the two companies would potentially also deal with regulatory challenges similar to the ones Grab had to deal with when it bought Uber’s Southeast Asia operations in 2018.
Published at Tue, 25 Feb 2020 08:05:01 +0000