GOTO - Refutes reports on merger talks with Grab

GOTO - Refutes reports on merger talks with Grab Goto Gojek Tokopedia (GOTO) has refused rumours on reviving merger talks with Grab that has been swirling for the past week. A source of Bloomberg was previously reported an ongoing discussion of potential acquisition with a combination of stocks and cash payment. (Source : CNBC Indonesia) Comment : We think that potential merger are likely discouraged by Indonesian regulator of KPPU that prohibit monopoly practice. A merger entity, should be it materialised, will command c. 90% of Indonesian market with much smaller competitors, Maxim and In-Drive only holding a small fraction of market share. In addition to regulator, we believe GOTO’s improving cost structure, stemming from Tokopedia’s stake sales should make a way for the company to prolong its dominance in ride hailing segment.