Grab and GoTo Engage in Merger Talks to Tackle Losses in Southeast Asia

Deal News | Feb 05, 2025 | EIN

Grab and GoTo Engage in Merger Talks to Tackle Losses in Southeast Asia

Grab Holdings and Indonesian ride-hailing and food delivery competitor GoTo Group are reportedly in advanced merger talks, seeking to address persistent losses in Southeast Asia's competitive market. The discussions resumed in December after a pause, aiming for a potential valuation of over US$7 billion. Previous negotiations have failed, leaving the current merger's outcome uncertain. While GoTo shares rose on merger news, Grab's shares fell. Despite concerns over potential losses, GoTo showed significant growth in its financial reporting, with increases in gross transaction value and positive adjusted EBITDA. CEO Patrick Walujo praised the ecosystem strategy's effectiveness. Both companies have pursued strategic partnerships and acquisitions to expand business capabilities and support small-medium enterprises.

Sectors

  • Ride-Hailing
  • Food Delivery
  • Financial Technology
  • E-commerce

Geography

  • Southeast Asia – The merger talks and operations of both Grab and GoTo are primarily focused on the Southeast Asian market.
  • Indonesia – GoTo Group, based in Indonesia, is a primary participant in the merger discussions, operating extensively in the country.
  • Singapore – Grab is headquartered in Singapore, making it a relevant geography for the company's strategic operations.

Industry

  • Ride-Hailing – Both Grab and GoTo are involved in the ride-hailing sector, providing transportation solutions via digital platforms.
  • Food Delivery – As part of their business models, both companies offer food delivery services which are vital to their competitive positioning in Southeast Asia.
  • Financial Technology – GoTo Group's projected positive adjusted EBITDA in the Financial Technology segment highlights its importance to the company’s strategy.
  • E-commerce – Both companies have partnerships and acquisitions, such as with TikTok, enhancing their connectivity and offerings in the e-commerce ecosystem.

Financials

  • US$7 billion – Reported potential valuation for the merger between Grab and GoTo.
  • Rp72.0 trillion – Reported core gross transaction value for GoTo up by 74% year-on-year.
  • Rp137.4 trillion – Reported overall group gross transaction value growth for GoTo.
  • Rp4.7 trillion – Gross revenue growth for GoTo as part of its financial results.
  • Rp137 billion – GoTo Group's positive adjusted EBITDA, marking a turnaround from the previous year's loss.

Participants

NameRoleTypeDescription
Grab HoldingsBidding CompanyCompanyA leading ride-hailing and food delivery company based in Southeast Asia.
GoTo GroupTarget CompanyCompanyAn Indonesian ride-hailing and e-commerce company involved in reported merger talks with Grab.
Patrick WalujoCEOPersonCEO of GoTo Group, commenting on company strategy and financial performance.
ReutersSourceCompanyNews organization providing information on the merger talks.
BloombergSourceCompanyFinancial news service reporting on the potential valuation of the merger.
MARKETING-INTERACTIVEPR/MediaCompanyMedia outlet reaching out to both companies for further information.