Rising competition from Sea Ltd. helping drive talks
Investors looking for combination to help trim operating costs
Grab Holdings and Gojek have made substantial progress in working out a deal to combine their businesses in what would be the biggest internet merger in Southeast Asia, Bloomberg cited people with knowledge of the talks.
The region’s two most valuable startups have narrowed their differences of opinion, though some parts of the agreement still need to be negotiated, said the people, who asked not to be named because the talks are private.
The final details are being worked out among the most senior leaders of the two companies, with the participation of SoftBank Group’s Masayoshi Son, a major Grab investor, one of the people said.
Under one structure with substantial support, Grab co-founder Anthony Tan would become the chief executive officer of the combined entity, while Gojek executives would run the new combined business in Indonesia under the Gojek brand, the sources told Bloomberg.
The two brands may be run separately for an extended period of time, one of the people said. The combination is ultimately aimed at becoming a publicly listed company.
Representatives of Grab, Goje,k and SoftBank declined to comment. The talks are still fluid and may not result in a transaction, the people said. The deal would need regulatory approval and governments may have antitrust concerns about the unification of the region’s two leading ride-hailing companies.
Grab and Gojek have been locked in a fierce, expensive battle for dominance in that business, along with food delivery and mobile payments, over the last several years.
Investors have been pushing for them to combine forces across Southeast Asia to reduce cash burn and create one of the most powerful internet companies in the region.
Grab, which is present in eight countries, was last valued at more than $14 billion ($18.75 billion), while Gojek, valued at $10 billion, has a presence in Indonesia, Singapore, the Philippines, Thailand, and Vietnam.
SoftBank has been pushing for a deal since Son visited Indonesia in January, but he has grown increasingly frustrated with the lack of progress. The old rivalry and personality clashes between the two companies’ leaders have led to deadlocked negotiations in the past, according to one of the people familiar with the talks, according to the Vietnam Investment Reviews (VIR)
By Thanh Van