Grab Holdings and GoJek owner GoTo Group have intensified merger discussions, with both companies targeting a deal in 2025. This move comes after years of on-and-off negotiations between the two dominant ride-hailing players in Southeast Asia, driven by the desire to reduce costs and competition in a market with over 650 million consumers.
Both companies, backed by major tech investors like Uber and SoftBank, have made strides towards profitability in recent years following their stock market debuts. However, intense competition has kept prices low and squeezed profit margins.
Challenges Remain
Past merger attempts have faced hurdles, including disagreements between the companies and potential antitrust concerns due to their market dominance in key Southeast Asian markets. While the current talks are progressing, the possibility of a deal remains uncertain.
Increased Competition
The Southeast Asian ride-hailing market is becoming increasingly competitive. New entrants like Bolt, in-Drive, and Lalamove Ride are gaining traction in Indonesia, Malaysia, and Thailand, while established players like Trans-Cab are expanding their services in Singapore.
Financial Performance
GoTo’s shares surged following the news of accelerated merger talks, while Grab’s stock has declined slightly in 2025. Combined, the companies’ market value approaches USD25 billion.
Strategic Moves
Both companies have taken steps to improve their financial positions. Grab has acquired a supermarket chain in Malaysia and a reservation app in Singapore, while GoTo agreed to relinquish control of its e-commerce arm to TikTok in a USD1.5 billion deal.
Economic Headwinds
Growth for both companies has slowed significantly in recent years due to rising inflation and interest rates, impacting consumer spending. This has led to a decline in demand for ride-hailing and food-delivery services.
