Talks of a potential merger between Southeast Asian tech giants GoTo Group and Grab have resurfaced, with government-backed investment entity Danantara emerging as a participant in preliminary discussion channels. While officially pitched as a facilitator protecting national interest, its involvement raises questions over the boundaries between regulation, investment, and industrial policy, multiple people told DealStreetAsia.
GoTo, in a statement issued on Monday (Nov 10), meanwhile, clarified that it had not reached any decision or agreement regarding a transaction with Grab and emphasised that it would continue to comply with governance and disclosure rules as a listed company. It added that its current focus remains on executing strategic priorities and progressing towards sustainable profitability.
Separately, Pandu Sjahrir, Danantara’s Chief Investment Officer, has said that the merger remains a business-to-business decision between the companies, as cited in local media reports on Tuesday.
According to the reports, Sjahrir said that Danantara would observe and support the process where appropriate while emphasising that commercial return considerations would remain central, alongside compliance, as both firms are publicly listed.
Danantara as facilitator, not arbiter
Jeffrey Bahar, group COO of Yamada Consulting & Spire Indonesia, said that Danantara’s potential involvement reflects policy considerations rather than regulatory authority.
“The involvement of Danantara will be [in the capacity of] the government representative looking after the best national interest of the ride-hailing industry in Indonesia,” Bahar told DealStreetAsia.
He noted that Danantara could assist in areas such as regulatory alignment, incentive structuring, or co-investment, provided its role is to facilitate, not approve, the merger.
Bahar said the move is in line with past precedents, pointing to the Indonesia Investment Authority’s (INA) co-investment with BlackRock in Traveloka, back in September 2022, as an example of state-linked capital supporting digital firms considered strategically important for the economy.
Traveloka secured a $300-million financing facility from INA, with BlackRock leading the round alongside Allianz Global Investors and Orion Capital Asia. The fund was intended to support the digital ecosystem’s growth in the travel sector, which was heavily impacted during the Covid-19 pandemic.
He also dismissed speculation that Danantara’s entry could serve as a mechanism for Telkom Group to unwind its GoTo position.
“The synergy between Telkomsel and GoTo, particularly through GoPay, is strategic rather than purely financial. There is no need for divestment.”
A recent research report, published on November 10 by Macquarie Capital, noted that the government continues to view the ride-hailing sector as strategic for employment and the digital economy, and has signalled that the merger should not disrupt ongoing operations.
Ari Jahja, Head of Indonesia Research at Macquarie Capital, said GoTo trades at around 2.2x FY26 EV/sales, compared with Grab at around 4.5x following a year-to-date rally, creating room for a deal premium for GoTo if terms advance.
The note also referenced Telkom and Telkomsel’s approximately 6.4-trillion-rupiah investment in GoTo, acquired at around 270 rupiah apiece, as context for shareholder positioning.
GoTo’s stock price has been declining since its listing on the IDX. On November 11, it fell to 67 rupiah apiece, down 82.73% from its IPO price of 388 rupiah apiece. GoTo’s market cap fell to 76.42 trillion rupiah from 464.27 trillion rupiah, which was higher than Telkom’s at 454.7 trillion rupiah.
While Grab Holdings was at $5.9 on November 10, down 52.42% from its IPO price of $12.4 apiece on Nasdaq, its market cap reached $24.11 billion, down from nearly $40 billion.
Competition concerns
Nailul Huda, digital economy director at the Center of Economic and Law Studies (CELIOS), said the government’s involvement has gone “too far for a corporate action”, noting that mergers and acquisitions are normally conducted without state endorsement.
Huda highlighted that GoTo and Grab collectively account for an estimated 91% of Indonesia’s ride-hailing market, a level that risks limiting competition.
“With such market share, the potential for dominance is wide open. Consumer choice narrows, and pricing power shifts heavily to the platform,” he told DealStreetAsia.
He added that competitors such as Maxim and inDrive would be pushed to smaller, peripheral markets, particularly in major cities where the two dominant players already hold entrenched networks.
KPPU’s limited role
Indonesia’s Competition Commission (KPPU) currently operates under a post-notification merger review system, meaning transactions are assessed after they close. While a combined share above 75% is considered a monopoly market structure, it is not automatically illegal. KPPU must still investigate market conduct to determine whether any abuse of dominance occurs.
This has prompted KPPU to advocate for amending Law No. 5/1999 to enable pre-merger review, particularly for digital platforms where competitive harm may stem from data-driven or algorithmic market behaviour.
In a statement issued on November 7, KPPU Chair M Fanshurullah Asa said existing legal tools are no longer adequate for platform-era dominance. “Dominance such as misuse of user data, algorithmic discrimination, and predatory pricing based on AI can no longer be addressed under the old framework,” he said.
“Algorithmic collusion can occur without explicit agreement when automatic pricing systems adjust to one another. As a result, prices may become uniform without any meeting, and this is difficult to prove legally,” he continued.
KPPU has proposed expanding the legal definition of market dominance to include data-driven and algorithmic control, and the acceptance of indirect evidence such as digital communication trails and economic data correlations in enforcement.
Separately, Deswin Nur, head of KPPU’s public relations bureau, said the commission has not held any meeting specifically regarding the potential merger.
“The information is being considered as part of our ongoing study of the online transport sector. The process is still ongoing, and we cannot provide conclusions at this time,” he told DealStreetAsia.
