Grab Holdings and GoTo Group, two biggest ride-hailing firms in Southeast Asia, are speeding up their merger discussion and target a deal this year.
Singapore’s Grab and Indonesia’s GoTo – which operates Gojek ride-haling and delivery services – have been intensifying merger talks in recent weeks and see 2025 as an opportune year for a deal, people familiar with the situation told Bloomberg.
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GrabFood drivers wait for order in Jakarta, Indonesia on Dec. 30, 2021. Photo by AFP |
Bloomberg Intelligence analyst Nathan Naidu said that progress in potential merger discussions between Grab and GoTo effectively strengthen both firms’ market leadership amid rising competition in the industry.
He added that the deal, however, will face tough regulatory scrutiny as the two are the top players in many Southeast Asian major markets.
Grab is backed by Uber Technologies while GoTo receives investment from a number of investors including Japan’s Softbank Group.
Both companies have been reporting losses for years and the combination is expected to reduce their costs and competitive pressure in a region of 650 million consumers.
12-year-old Grab has dominance in Singapore, the region’s richest country. Reuters reported last year that the company is expected to churn out an annual net profit in 2025.
GoTo is expected to eke out a profit in 2026 but even then the margin will unlikely be substantial.
