Talks surrounding the Grab-GoTo merger have hit regulatory obstacles, with Indonesian authorities raising concerns over market concentration, labor welfare, and foreign ownership, according to three sources familiar with the deal.

Indonesian Government Wants GoTo to Be Majority Locally Owned

GoTo is currently 73.90% owned by foreign investors, including SoftBank Group and Taobao China Holding, a unit of Alibaba Group, as disclosed in its 2024 annual report.

Indonesian lawmakers have expressed a preference for greater domestic control of the company.

Sufmi Dasco Ahmad, Deputy Speaker of the Indonesian parliament and a senior figure in the ruling party, said, “The government wants GoTo to be majority-owned by Indonesians”.

He did not explain how this would be implemented or comment on specific conditions tied to the merger.

Regulatory Scrutiny Over Market Control and Job Conditions

Indonesian regulators are reviewing how a merged Grab-GoTo entity might affect job security and market competition.

Two sources said the government is evaluating the broader implications for the nation’s economy and workforce.

A third source noted that the government expects the merged company to improve benefits for drivers and riders, such as better bonuses and fees.

These conditions are part of ongoing confidential discussions between the companies and officials.

Public Protests Over Merger and Wage Concerns

In May, protests erupted across multiple Indonesian cities as ride-hailing drivers and riders voiced opposition to the proposed merger.

Their concerns focused on the risk of job cuts and price increases, which they feared could result from a dominant market player.

Companies Respond to Merger Reports

Grab stated last week that it “was not involved in any discussions for a potential transaction with GoTo and has not entered into any definitive agreements”.

Separately, Grab recently raised $1.5 billion through a convertible notes offer, citing acquisitions as one of the uses for the funds.

GoTo, valued at $4.4 billion, referred to previous regulatory disclosures, maintaining that “there has been no agreement with any party about a potential transaction.”

Indonesia’s Ministry of Transportation declined to comment. Deputy Manpower Minister Immanuel Ebenezer said he had no information regarding any conditions tied to the potential merger.

PHOTO: ORE HUIYING/BLOOMBERG/GETTY IMAGES

This article was created with AI assistance.