The Indonesian Competition Commission (KPPU) said it cannot evaluate the potential merger between Grab and GoTo until the parties formally notify the commission within 30 days after the transaction becomes effective.

This announcement follows media speculation about the merger, valued at 114.8 trillion rupiah (US$7.18 billion).

KPPU Chairman M. Fanshurullah Asa stressed that under Indonesia’s mandatory post-merger notification system, the evaluation process begins only after an official notification is received.

To prepare for potential impacts, KPPU has initiated independent research that aligns with its regulations under KPPU Rule No. 3 of 2023.

This research will include analyses of market entry barriers, anti-competitive behavior, efficiency, national industry development, and the protection of micro, small, and medium enterprises.

Asa warned that KPPU has the authority to impose administrative actions or nullify transactions if violations occur.

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🔗 Source: Komisi Pengawas Persaingan Usaha

🧠 Food for thought

1️⃣ Indonesia’s post-merger notification system creates unique business risks

Indonesia’s competition law framework requires companies to notify KPPU of mergers within 30 business days after transactions become legally effective, unlike jurisdictions requiring pre-approval1.

This system creates significant risks for companies, as evidenced by KPPU’s record-breaking fine of IDR 20.66 billion against PT Citra Prima Sejati for notifications that were 1,220 days late2.

The KPPU can impose fines of IDR 1 billion (approximately $70,000) per day for late notifications, with a maximum cap of IDR 25 billion (approximately $1.75 million)1.

Even after a merger is completed, KPPU maintains the authority to cancel transactions entirely if they’re deemed anticompetitive, which is a notable aspect of Indonesia’s regulatory framework3.

While companies can seek voluntary consultations before merging, these opinions remain non-binding, leaving significant uncertainty for massive deals like the potential Grab-GoTo merger4.

2️⃣ Grab-GoTo merger would create unprecedented market concentration

The proposed $7 billion merger between Grab and GoTo would reshape Southeast Asia’s digital economy by creating an entity controlling over 70% of the ride-hailing market and 60% of the food delivery market in the region5.

Both companies have faced financial challenges – Grab’s share price has fallen approximately 70% since its Nasdaq debut despite achieving profitability, while GoTo reported significant losses of $174 million in the first half of 20246.

The merger represents a strategic attempt to achieve economies of scale in a market projected to grow substantially, with Southeast Asian ride-hailing revenues expected to reach $11.53 billion by 20296.

Analysts remain skeptical about regulatory approval given both companies’ dominant market positions and previous regulatory scrutiny of Grab’s acquisition attempts5.

The potential nationalist concerns in Indonesia add another layer of complexity, as GoTo (formed from the merger of Gojek and Tokopedia) is seen as a homegrown champion in Indonesia’s digital economy7.

Recent Grab developments

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