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Gojek, Grab merger could spell start of antitrust investigation
Reports about a merger between homegrown Gojek and Singapore-based Grab have been circulating since SoftBank Group’s Masayoshi Son, a major backer for Grab, visited Indonesia in January.
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Gojek and Grab drivers check their phones while waiting for customers in Jakarta on April 7. (JP/Wendra Ajistyatama)
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outheast Asian ride-hailing giants Gojek and Grab are reportedly discussing a merger deal, but officials and experts have warned that a consolidation of such dominant companies will cause a market monopoly.
A monopoly could result in price dumping, which could prevent new players from seeing a successful transition into the market or result in a single player having control over prices.
The Business Competition Supervisory Commission (KPPU) would evaluate any corporate actions based on their effect on market concentration and competition post-merger and acquisition, KPPU commissioner Guntur Saragih said on Thursday.
“Every corporate action can affect the market structure, especially mergers and acquisitions in the same horizontal,” he said. “If the Grab-Gojek merger were to happen, the commission would need a notification no later than 30 days after the merger is made effective.”
Indonesia only has a few ride-hailing companies, especially in the two-wheeler segment. Other than Gojek and Grab, which are valued at about US$10 billion and more than $15 billion respectively, Russia-based Maxim has operations in the country, having entered the scene in 2018. In the same year, Grab acquired American ride-hailing company Uber in Indonesia as the latter left the Southeast Asian market.
Read also: Gojek looks ahead to more self-funding on core businesses' profitability
According to market data company Statista, Gojek dominated the market with 79 percent market share in 2018, followed by Grab with 14.7 percent and Uber with 6.11 percent.
