Grab's acquisition of GoTo has been blocked, and it is rumored that the Indonesian government has raised a regulatory red light

Grab's plan to acquire GoTo Group (the parent company of the private car-hailing platform Gojek) in Indonesia has become uncertain and is likely to fall through due to the Indonesian government's review requirements for local control and anti-monopoly, casting a shadow over the prospects of the negotiations that could have created the largest platform merger in Southeast Asia.

Three people familiar with the matter told Reuters that Grab originally planned to acquire GoTo for about $7 billion. After the merger, its market share in the ride-hailing and food delivery markets in Indonesia would exceed 91%. However, the Indonesian authorities demanded that the merged company be controlled by local Indonesian capital and put forward conditions such as driver and rider benefits, which delayed the negotiations.

In May this year, protests broke out in several cities in Indonesia. Tens of thousands of drivers and delivery workers were worried that the merger would lead to monopolies, lower salaries and push up platform fees.

Reuters pointed out that currently 73.9% of GoTo's shares are held by foreign investors, including SoftBank and Taobao China Holdings, a subsidiary of Alibaba. The Indonesian parliament emphasized that the government hopes GoTo will maintain its "Indonesian-controlled" status, but did not specify the way to achieve it.

The deal has not been finalized yet. Grab said it did not hold any deal talks with GoTo last week and no agreement was signed. GoTo reaffirmed that there were no relevant transaction arrangements.

If the transaction is completed, the analysis indicates that both parties can cut costs by integrating their businesses. Grab's current market capitalization is approximately 19 billion US dollars, while GoTo's is about 4.4 billion US dollars.