Indonesia’s ride-hailing and payments giant Gojek is in advanced discussions about merging with local e-commerce pioneer PT Tokopedia, ahead of a planned initial public offering of the combined entity, people with knowledge of the matter said.
The country’s two most valuable start-ups have signed a detailed term sheet to conduct due diligence of each other’s business, said the people, who asked not to be named, as the discussions are private.
Both sides see potential synergies and are keen to close the deal as soon as possible in the coming months, they said.
The merged entity would create an Indonesian Internet powerhouse with a combined valuation of more than US$18 billion. Its businesses range from ride-hailing and payments to online shopping and delivery — a local mashup of Uber Technologies Inc, PayPal Holdings Inc, Amazon.com Inc and DoorDash Inc.
It plans to go public in the US and Indonesia.
“This is potentially a blockbuster deal,” said Usman Akhtar, a partner at Bain & Co in Singapore. “The deal would have a lot of impact outside of these two companies and have ripple effects that aren’t even all known right now.”
Gojek and Tokopedia have considered a potential merger since 2018, but discussions accelerated after deal talks between Gojek and archrival Grab Holdings Inc reached an impasse, the people said.
Grab chief executive officer Anthony Tan (陳炳耀) continues to resist pressure from Softbank Group Corp founder Masayoshi Son to give up some control in a combined entity with Gojek, the people said.
Son, who had been a steadfast supporter of Tan in the past, is losing patience with the Grab cofounder’s reluctance to cede some control and is now supporting a merger between Gojek and Softbank-backed Tokopedia, the people said.
The two homegrown tech pioneers have common investors, including Google, Temasek Holdings Pte and Sequoia Capital India.
Tokopedia is also backed by Alibaba Group Holding Ltd (阿里巴巴), which has its own e-commerce unit in the region, Lazada.
Representatives of Gojek and Tokopedia declined to comment.
The firms are valued at about US$10.5 billion and about US$7.5 billion respectively, people familiar with their accounts said, and merger ratios are under discussion.
Founders of the two companies have been friends since their inception more than 10 years ago and anticipate an amicable alliance.
A combined Gojek and Tokopedia would dominate in Indonesia, one of the world’s fastest-growing Internet economies. Their planned US listing would provide global investors an alternative to Sea Ltd, the only major Southeast Asian Internet company listed in the US.
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