GoTo Group’s shares are showing renewed momentum ahead of a key shareholder meeting that could clear the path for a long-discussed merger with regional rival Grab Holdings Ltd.
The Indonesian tech group’s stock has climbed about 20% so far this quarter in Jakarta, outperforming global ride-hailing and delivery peers. The rally has been fuelled by growing support from major shareholders and the Indonesian government for a potential takeover by Grab, following years of weak performance.
At a shareholders’ meeting on Wednesday, investors will vote on the proposed appointment of Hans Patuwo as chief executive officer, replacing Patrick Walujo, who has been opposed to a merger with Singapore-based Grab. Market observers say a leadership change could accelerate talks on a deal that would create one of Southeast Asia’s largest technology groups.
Analysts note that a combined Grab-GoTo entity would command significantly greater scale and market share across the region. GoTo, which operates services ranging from ride-hailing and food delivery to e-commerce and financial services, has been exploring strategic options as it works towards profitability.
Despite the recent rebound, GoTo’s market capitalisation remains below US$5 billion, sharply lower than the more than US$30 billion valuation it reached shortly after its 2022 listing. The company’s founders and key investors, including SoftBank Group, have supported changes at the top, while Indonesia’s sovereign wealth fund Danantara is reportedly helping to facilitate discussions with Grab.
The outlook for GoTo has improved in recent months, with the company raising its guidance and analysts expecting it to turn profitable next year. However, analysts caution that merger speculation is currently driving sentiment more than fundamentals.
Grab, which is backed by Uber Technologies, is also expected to report a profit this year and has been keen on a deal to strengthen its operating leverage. A merger could lead to cost savings and stronger margins, but it has also raised concerns in Indonesia about reduced competition, higher prices and potential job losses, given the combined group’s dominant position in ride-hailing and food delivery.
Government involvement is seen as a key factor in addressing regulatory and competition concerns, with analysts suggesting that changes in management and shareholder backing could improve the chances of approval should a merger move forward.
