Gojek and Tokopedia reportedly in talks for US$18bn merger deal

Indonesia's decacorn Gojek and unicorn Tokopedia are reportedly in advanced talks of a merger to seal a US$18 billion merger ahead of a potential dual listing in Jakarta and the United States. Citing people familiar with the matter, Bloomberg reported that both companies see "potential synergies" and are looking to close the deal in the coming months. It is added that the merged entity will create an Indonesian internet powerhouse, with businesses ranging from ride-hailing and payments to online shopping and delivery. There are also reportedly plans to go public in Indonesia and the United States. Both Gojek and Tokopedia have declined to comment on the matter. 

Bloomberg also reported that Gojek and Tokopedia had contemplated merging since 2018, but discussions quickened after merger talks between Gojek and Grab "reached on impasse" after Grab CEO Anthony Tan insisted on having large portion of control over the merged entity. Gojek and Grab also reportedly had a clash of opinion on how to handle the Indonesian market. Grab and Gojek previously declined to comment on MARKETING-INTERACTIVE's queries regarding the merger talks.

When news of the Gojek-Grab merger first surfaced last March, Indonesian competition and consumer commission Yayasan Lembaga Konsumen Indonesia reportedly expressed “rejection” of the proposed merger. According to the competition watchdog, the merger risks violation of consumer rights as there will no longer be more choices for consumers. First reported by Bisnis, the Indonesian watchdog said the merging of two rival ride hailing companies will create “unfair business competition”. The article said chairman Tulus Abadi said the current ride hailing industry is monopolistic in nature, and the Gojek-Grab merger could lead to one group setting the prices in the market. 

Meanwhile in Singapore, the Competition and Consumer Commission of Singapore said last month that it is looking into the potential merger of Grab and Gojek and have written to the parties for more information. The commission's spokesperson added that under Singapore's competition law, section 54 of the Competition Act (Cap. 50B) prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition.

Earlier this week, Grab said its total group net revenues have grown approximately 70% year-on-year last year compared to 2019 despite a competitive environment. Its president Ming Maa added that group revenues have returned to “well over 100% of pre-COVID levels” and it has met its growth and profitability targets. Its monthly earnings before interest, taxes, depreciation, and amortisation (EBITDA) throughout 2020 was also reduced by approximately 80% as a result of disciplined spending and being prudent in stewarding its shareholder capital.

Separately, in October last year, Tokopedia was reportedly to receive an investment of approximately US$350 million from Google and Singapore investment firm Temasek Holdings. Citing its sources, Bloomberg said the investment will be a major cash infusion that will aid in Tokopedia's post-COVID-19 expansion.

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