Gojek to merge with Tokopedia

by BLOOMBERG

JAKARTA • Indonesia’s ride-hailing and payments giant Gojek agreed to combine with e-commerce pioneer PT Tokopedia to create the largest Internet company in the world’s fourth most-populous nation.

The combined entity is set to form an Indonesian powerhouse, encompassing businesses from car-sharing and fintech to online shopping and delivery. The two companies said yesterday they will form a holding company called GoTo through a deal backed by shareholders including Google and Alibaba Group Holding Ltd.

The companies together were valued at about US$18 billion (RM74.37 billion) during their merger talks, with Gojek shareholders set to receive 58% of the new entity’s ownership and Tokopedia holders the rest, people familiar with the matter have said.

Longer term, the combined entity may seek to go public. The two companies are said to have discussed a variety of scenarios with a goal of ultimately listing in both Jakarta and the US. The target valuation in the public markets is between US$35 billion and US$40 billion, Bloomberg News has reported.

Gojek co-CEO Andre Soelistyo, 37, will head the combined app giant. Patrick Cao, president of Tokopedia, will retain that title at the new entity.

William Tanuwijaya, CEO of Tokopedia, will continue to lead the online shopping pioneer he founded in 2009, while Gojek co-CEO Kevin Aluwi will continue to helm ride-hailing and delivery giant Gojek. Group CEO Soelistyo will head the payments and financial services unit GoTo Financial.

Gojek and Tokopedia have been in discussions for a possible merger since late December after Gojek’s negotiations with rival Grab collapsed. Grab last month agreed to go public in the US through a combination with Altimeter Growth Corp, the largest-ever merger with a blank-cheque company.

“Today is a truly historic day as we mark the beginning of GoTo and the next phase of growth for Gojek, Tokopedia and GoTo Financial,” Soelistyo said in a statement. “Gojek drivers will deliver even more Tokopedia packages, merchant partners of all sizes will benefit from strengthened business solutions and we will use our combined scale to increase financial inclusion in an emerging region with untapped growth potential.”