Singapore's competition watchdog looking into potential merger between Grab and Gojek

SINGAPORE — The Competition and Consumer Commission of Singapore (CCCS) is looking into the potential merger that is being brokered between ride-hailing firms Grab and Gojek.

In response to TODAY’s queries on Thursday (Dec 3), it said that it is aware of news reports on the two companies having made substantial progress in working out a deal to combine their businesses. It is now looking into the matter.

The statutory board under the Ministry of Trade and Industry added that Section 54 of the Competition Act (Cap 50B) prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition.

News agency Bloomberg reported on Wednesday that the two startups have narrowed their differences in opinion, though some parts of the agreement still need to be negotiated.

In another report by news agency Reuters, Grab’s chief executive officer Anthony Tan told employees in an internal note on Thursday that the firm is in a position to make acquisitions. 

“There is speculation again about a Gojek deal,” Mr Tan wrote in the note on the company’s internal communication platform.

“Our business momentum is good, and as with any market consolidation rumours, we are the ones in a position to acquire,” he added. He did not give specific details on what the merger would entail.

The final details are now being worked out among senior leaders of both companies, Bloomberg reported.

When contacted, a spokesperson for Gojek told TODAY that it does not comment on rumours or speculations, while Grab declined to comment on the matter.

In 2018, CCCS had ruled that Grab’s merger with American ride-hailing firm Uber’s Southeast Asian arm was an infringement of competition laws and imposed a S$13 million fine on the two businesses.

The watchdog also laid out a set of remedies to cushion the impact of the merger on riders and drivers, including removing Grab's exclusivity arrangements with any taxi fleet.

Bloomberg reported that Mr Tan from Grab would become the chief executive officer of the combined entity under the merger. 

Gojek executives would then run the new combined business in Indonesia under the Gojek brand.

The two firms may also be run separately for an extended period of time. The ultimate aim is for the merged business to become a public listed company, Bloomberg said.