Gojek, Tokopedia Reportedly Finalizing Merger Deal; Listings In US, Jakarta

Indonesian digital giants Gojek and Tokopedia are reportedly in the midst of hammering out a merger deal which could include going public on both the U.S. and Jakarta markets.

Sources told Bloomberg that the companies are finalizing terms of a merger agreement that would result in a combined company that would offer a wide range of services, including digital payments, ride-hailing and grocery delivery.

Gojek and Tokopedia declined to comment, Bloomberg said.

Under the proposed deal, which is still under discussion, Gojek shareholders would hold a 60 percent stake in the new company, with Tokopedia shareholders owning the remaining 40 percent.

The companies are also reportedly mulling how to take the new company public. One scenario calls for Tokopedia to list first on the Jakarta exchange, then merge with Gojek and seek a listing for the combined entity on the U.S. market. A second scenario would have the companies merge first, then list on the Jakarta and U.S. markets concurrently. The market target valuation is between $35 billion and $40 billion, according to  Bloomberg.

The companies are also debating whether they should list on the U.S. market through a traditional initial public offering (IPO) or special purpose acquisition company (SPAC), Bloomberg added.

Earlier this month, reports emerged that Tokopedia was being eyed by SPAC firm Bridgetown Holdings as a potential listing target.

The Gojek-Tokopedia merger talks come in the wake of failed negotiations between Gojek and Singapore’s Grab. According to Bloomberg, concerns over whether a Gojek-Grab merger could win regulatory approval was a key reason the deal was scrapped, as the combined company would have dominated ride-hailing and delivery services in several Southeast Asian markets.

Bloomberg noted that Gojek and Tokopedia also have several investors in common, including Google, Temasek Holdings and Sequoia Capital India, and that their respective founders have been friends for years.

Reports of a possible marriage between Gojek and Tokopedia began appearing in early January,  as a deal would allow them to better compete with regional rivals Grab and Sea Group.

In a recent interview with CNBC, Gojek Co-CEO Kevin Aluwi said his company was keen to expand its global reach.

“One of our primary focuses for 2021 is really to expand our footprint outside of Indonesia,” Aluwi told CNBC in an interview.

“Over the last few years, we’ve definitely invested relatively smaller amounts in our markets outside of Indonesia. But, we think this is the year where we really want to spread our wings and be a regional and global business,” Aluwi added.

Founded in 2010, Gojek now operates in five nations and 200 cities throughout Southeast Asia.