KUALA LUMPUR: Grab Holdings Ltd and GoTo Group have accelerated merger talks and target a deal this year, seeking to end years of losses in South-East Asia’s competitive Internet market.
Discussions had intensified in recent weeks and the companies see 2025 as an opportune year for a deal, said sources.
The unprofitable firms – the two biggest ride-hailing providers in South-East Asia –have held on-and-off talks for years, targeting a combination that would reduce costs and competitive pressure in the region of more than 650 million consumers.
Singapore’s Grab, backed by Uber Technologies Inc, and Indonesia’s GoTo, whose investors include Softbank Group Corp, have both made progress toward profitability following their stock-market debuts in recent years.
But competition for users has kept prices in check and squeezed margins.
In the years past, hurdles for a merger have included disagreements between the parties as well as potential antitrust obstacles caused by the companies’ dominance in markets such as Indonesia and Singapore.
And the current talks may not lead to a transaction at all, said the sources.
A GoTo spokesperson declined to comment, while Grab representatives had no immediate comment when contacted by Bloomberg News. DealStreetAsia earlier reported the companies’ target of reaching a deal this year.
Shares of GoTo advanced as much as 6.2% in Jakarta yesterday, bringing their gain this year to more than 20%.
Grab has declined about 4% in New York so far in 2025. Together, the companies’ market value approaches US$25bil, rivaling the capitalisation of some of the biggest companies in South-East Asia.
While discussing a combination, the companies each have struck smaller deals in a bid to improve their finances.
Grab has bought a supermarket chain in Malaysia and a reservation app in Singapore, while GoTo agreed to relinquish control of its loss-making eCommerce arm to ByteDance Ltd’s TikTok in a US$1.5bil deal a year ago.
Meanwhile, the companies’ growth has cooled dramatically from triple-digit rates in years past as customers in the region curb spending to cope with elevated inflation and interest rates.
Demand is increasing at a slower pace as their customer base expands and consumers are less eager to hail a ride or get food delivered to their door in a challenging macroeconomic climate. — Bloomberg
