Investing.com -- Grab Holdings (NASDAQ: NASDAQ:GRAB) shares climbed 8% amid reports that the company is considering a takeover bid for rival GoTo Group, which could value the Indonesian company at over $7 billion. The potential all-stock deal suggests a premium of roughly 20% above GoTo's current share price, according to a report from Bloomberg, citing sources.
The discussions, which have been intermittent over the years, have reportedly gained momentum in recent weeks, with 2025 viewed as a favorable year for the transaction, DealStreetAsia reported. A merger would aim to alleviate the financial strain from fierce competition in Southeast Asia's internet market, which serves a consumer base of more than 650 million.
Both Grab and GoTo have seen their shares fluctuate following their respective public offerings, with Grab's stock declining around 4% in New York trading so far in 2025, while GoTo's shares in Jakarta have surged over 20% this year. A successful merger could create a combined entity with a market value nearing $25 billion, comparable to some of Southeast Asia's largest companies.
The two companies, which dominate the ride-hailing industry in the region, have faced challenges in the past, including disagreements and potential antitrust issues. However, a merger could lead to significant cost reductions and less competitive pressure, improving profitability prospects.
Alicia Yap, an analyst at Citi, commented on the potential merger, stating, "We would expect few positive synergies if the reported news materialized this time." Yap highlighted the benefits of a merger, such as reduced user subsidies, margin improvement, accelerated user acquisition, and increased merchant monetization through cross-selling financial services. Despite the potential advantages, there is no guarantee that the current discussions will result in a definitive agreement.
Grab is set to discuss its fourth-quarter results of 2024 on February 20 (Asia time), where further insights into the company's performance and strategic direction may be provided.
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