Grab CEO Anthony Tan said in a note to employees that it is "well placed to make acquisitions", Reuters said, after it was reported recently by Bloomberg that Grab and Gojek have reportedly "made substantial progress" to merge. In the internal note, Tan acknowledged chatter about a potential deal with Gojek and explained that the company has good business momentum and it is "the ones in a position to acquire", Reuters said.
Quoting Tan, Reuters added that despite the challenging year, Grab is still profitable before overheads and it is also striving to become the top food delivery player in Indonesia, Gojek's home base. Grab and Gojek declined to comment on MARKETING-INTERACTIVE's queries.
Meanwhile, the article on Bloomberg said that following the merger, Tan would be named CEO of the combined entity while Gojek executives will lead the new entity in Indonesia under the Gojek brand and that the ultimate aim of the combined entity is to become a publicly-listed company.
Earlier this year, Gojek's spokesperson denied talks about a potential merger with Grab, saying that there were "no plans for any sort of merger" and that "media reports regarding discussions of this nature are not accurate". This came after The Information reported that both parties had "a serious conversation" about a potential tie-up. Meanwhile in March, the Indonesian competition and consumer commission Yayasan Lembaga Konsumen Indonesia (YLKI) reportedly expressed “rejection” of the proposed Gojek-Grab merger. The commission explained that the merger risks violation of consumer rights as there will no longer be more choices for consumers, and it will lead to "unfair business competition".
Both Grab and Gojek have locked horns over the past few years as they wrestled for dominance in the ride hailing, food delivery and payments space. According to Bloomberg, Grab is valued at about US$14 billion while Gojek is valued at US$10 billion. Acquisitions and mergers, however, are not new for both parties. In February, Gojek reportedly acquired a minority stake Indonesian taxi operator Blue Bird for US$30 million. Meanwhile, two years ago, Grab acquired Uber’s Southeast Asia operations, integrating Uber’s ride-sharing and food delivery business in the region into its platform.
Following the merger, the Competition and Consumer Commission of Singapore (CCCS) issued an infringement decision after it found that the transaction infringed Section 54 of the Competition Act. The section states that mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore for goods or services are prohibited. However, CCCS has since lifted the restrictions it previously imposed on the firm.
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