Grab s acquisition of GoTo is blocked, and Indonesian government s supervision lights are rumored

In May this year, protests broke out in many cities in Indonesia, and tens of thousands of drivers and delivery workers were worried that the merger would cause monopoly, lower salaries and push up platform fees.

Reuters pointed out that GoTo is currently held by foreign investors, including SoftBank and Taobao China Holdings, a subsidiary of Alibaba. The Indonesian parliament stressed that the government hopes that GoTo maintains its "Indonesian holding" status, but did not explain how it is implemented.

If the transaction is completed, the analysis means that both parties can reduce costs by integrating the business. Grab currently has a market value of about $19 billion, while GoTo is about $4.4 billion.

Grab's plan to acquire Indonesia's GoTo Group (parent company of private car-hailing platform Gojek) is in uncertainty, which may be the result of the Indonesian government's review requirements for local holdings and antitrust, casting a shadow on the prospects for 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 US$7 billion (about S$9 billion), and its share in the online car-hailing and food delivery market after the merger will exceed 91%. However, the Indonesian authorities require the merged company to be controlled by Indonesian local capital and put forward conditions such as driver and rider welfare, delaying negotiations.

The transaction has not been finalized yet, and Grab said that it did not start trading negotiations with GoTo last week, nor did it sign any agreement. GoTo reiterated that there are no relevant transaction arrangements.