FILE PHOTO: Signages at the Grab Holdings Ltd. headquarters in Singapore, on Sunday, Aug. 20, 2023. GoTo and Singapore-based Grab, whose significant shareholder is Uber Technologies, have held on-and-off discussions about a merger for years. - Bloomberg
SINGAPORE: The competition watchdog here has not received any notification from ride-hailing firms Grab or GoTo on any proposed merger, but said it remains open to engaging with the parties.
In response to queries from The Straits Times, the Competition and Consumer Commission of Singapore (CCS) said on Nov 14 that it was aware of media reports about a potential tie-up.
“CCS is open to engaging with the parties via our merger notification and pre-notification processes. CCS has, to date, not received any notification for decision from Grab or GoTo on a proposed merger,” the commission said.
GoTo and Singapore-based Grab, whose significant shareholder is Uber Technologies, have held on-and-off discussions about a merger for years.
GoTo, formed from the merger of Gojek and Tokopedia, is an Indonesian tech giant, and any deal would directly affect its home market and millions of local drivers.
Such merger reports have surfaced periodically over the past few years, but intensified last week after Indonesia’s State Secretary Prasetyo Hadi confirmed on Nov 7 that a merger plan between the two ride-hailing giants was being discussed.
In the days that followed, rumours about the merger began circulating on Indonesian news sites and social media accounts, including claims that Singapore “reportedly seeks” to block the move.
According to these posts, Singapore regulators were allegedly concerned that the Indonesian government was trying to “meddle” with one of its major tech companies, amid reports that state investment arm Danantara Indonesia was in talks to take a minority stake in a combined Grab-Gojek entity.
These outlets further suggested that the Singapore authorities were supposedly examining whether Danantara’s planned stake could affect Grab’s ability to make independent business decisions. They were also reportedly looking into purported economic and national security risks linked to a merger involving such a large regional tech player.
Reuters reported on Nov 13 that Danantara was also in discussions to take a “golden share” in the combined entity. A golden share usually grants veto rights over key decisions, even if the holder owns only a small stake.
The report also said Grab chief executive Anthony Tan had recently met Indonesian President Prabowo Subianto to lobby for the transaction.
In its response to ST, Singapore’s competition watchdog said that in general, under the Republic’s voluntary merger regime, businesses can enter into commercial transactions as long as these do not infringe the Competition Act. The Act is Singapore’s main law governing fair market conduct.
“However, CCS can investigate if it suspects that a commercial transaction such as a merger or joint venture might infringe the Competition Act. Parties should seek legal advice on whether any merger they may be contemplating complies with competition law in Singapore,” it said.
Grab’s most significant merger-related case in Singapore was its 2018 acquisition of Uber’s South-East Asia operations, which saw Uber exit the region in return for a 27.5 per cent stake in Grab.
The deal drew scrutiny because it effectively combined the two largest ride-hailing players at the time overnight, giving Grab a dominant position in Singapore’s market.
After an investigation, CCS found that the transaction had led to a substantial lessening of competition. The commission fined Grab about S$6.6 million (US$5.08 million) and Uber about S$6.4 million, for a combined S$13 million.
It also required both parties to lessen the impact of the transaction on drivers and riders, and to open up the market and level the playing field for new players.
The measures included ensuring Grab drivers are free to use any ride-hailing platform, removing Grab’s exclusivity arrangements with any taxi fleet in Singapore, and maintaining Grab’s pre-merger pricing algorithm and driver commission rates. - The Straits Times/ANN
