Grab-GoTo deal hits snag caused by state-backed holder’s stake

GRAB Holdings’ planned multibillion-dollar acquisition of GoTo Group has hit a stumbling block.

Negotiations over the deal have snagged over Indonesian wireless carrier Telkomsel’s roughly 2 per cent stake in GoTo, sources said.

The carrier – majority-owned by state-controlled Telkom Indonesia – has indicated it is unwilling to sell at anywhere near current valuations because it originally invested at a much higher price, they shared.

The company has expressed its concerns about losses linked to state capital – something that is punishable by Indonesian law, said the sources, who asked not to be identified because the discussions are private.

While Telkomsel can choose not to accept any takeover offer by Grab and hold on to its stake, it is trying to take advantage of a potential bid and negotiate a higher price for itself, they added.

Singapore’s Grab, meanwhile, wants to ensure all Indonesian stakeholders are onboard with any takeover proposal because it would need an approval from the country’s government for the deal.

The Telkomsel issue is the latest hurdle for regional ride-hailing and delivery leader Grab’s years-long effort to combine with GoTo.

Potential regulatory opposition and differences in perceived valuation have caused delays in the discussions – but Grab has pushed for a deal that would increase its market share and alleviate pricing pressures.

Telkomsel, formed as a joint venture between Telkom and Singtel, in 2021 invested US$300 million in what later became GoTo.

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This was on top of a US$150 million convertible bond-investment the previous year. A sale at GoTo’s current price levels would create a loss of hundreds of millions of dollars, the sources said.

Negotiations are ongoing and a separate structure to buy Telkomsel out is being discussed, but no conclusion has been reached, they added.

Representatives of Grab and GoTo declined to comment.

A Telkomsel spokesperson said the company does not comment on market speculation, rumours or ongoing discussions involving third parties.

Antitrust concerns and politicians’ worries preventing takeover

GoTo has a market capitalisation of about US$4.2 billion, while Grab, which is traded in New York, is valued at US$18.5 billion.

A takeover has not materialised, partly because of antitrust concerns – likely to arise from combining the region’s two dominant ride-hailing providers.

Indonesian politicians also worry about rising ride prices, potential job reductions and the loss of a national tech champion to a foreign owner.

Meanwhile, a new draft decree to regulate Indonesia’s ride-hailing industry could impact the companies’ profits and margins, potentially affecting any takeover’s rationale and valuation.

Discussions about the size of the commissions that companies can extract from their drivers and insurance to cover accidents and deaths have not been finalised, Indonesia’s Minister of State Prasetyo Hadi said.

Indonesian President Prabowo Subianto is also under pressure to respond to drivers’ demands for better compensation and conditions, after escalating protests across the country demonstrated the growing political might of the sector.

Indonesia’s millions of car and motorcycle-taxi drivers are poorly paid, largely uninsured and increasingly angry at the government, blaming it for failing to create enough secure and well-paying jobs for the country’s growing workforce.

Grab, which is backed by Uber Technologies, would strengthen its position as the biggest South-east Asia ride-hailing and food-delivery company by buying GoTo.

The Singapore-based company has considered a valuation of more than US$7 billion for GoTo, sources said in February 2025, with one option being an all-stock purchase at about 100 rupiah (S$0.0076) a share.

That has changed recently, one of the sources said, considering that GoTo’s stock price has fallen since – by about 30 per cent over the past 12 months.

Both Grab and GoTo have seen growth slow dramatically from triple-digit rates in years past, as they move away from a frenetic expansion to focus on profits.

Yet, their margins are slim, with competition keeping prices relatively low. BLOOMBERG