(Bloomberg) — Grab Holdings Ltd. and GoTo Group, Southeast Asia’s largest ride-hailing companies, have restarted talks to merge, a potential blockbuster combination aimed at making up for years of losses resulting from fierce competition between the two companies. Have to reduce.
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The companies, leaders in food-delivery in a region of more than 650 million people, are having preliminary discussions about different scenarios, people familiar with the matter said. One possible option is for Singapore-based Grab to acquire GoTo using cash, stock or a combination of the two, one of the people said, adding that the Indonesian company would be looking to acquire GoTo after Patrick Walujo took over as chief executive officer. More open to deals. Last year.
Discussions have been ongoing, said one person, on condition of anonymity because the talks are private. Major shareholders of both companies support a deal and are pushing talks forward, the people said.
The talks may not lead to a full merger or any agreement, the people said. Options the companies have explored include splitting up their core markets, with Grab gaining control of its Singapore home base and some other markets, while GoTo retains control in Indonesia.
Valuation remains a key hurdle to any deal, the people said, as GoTo shares have fallen about 30% in the past 12 months. Other concerns include deal structure and governance, he said.
A GoTo representative said, “No such discussions are taking place,” while a Grab representative declined to comment.
Each company has millions of ride-hailing users, and a merger could help them raise rates and find synergy in key markets like Indonesia where competition has kept prices low. The larger size can also help combined…