Gojek and Tokopedia Have Reportedly Signed a Merger Agreement

The news of the merger between Gojek and Tokopedia has been circulating since the beginning of 2021. The latest information is that the two companies have signed a merger agreement. “Tokopedia and Gojek have signed a conditional sale and purchase agreement (CSPA) related to the merger agreement,” wrote the D-Insights report revealed by TechInAsia, Tuesday (9/3/2021).

The report states that Gojek shareholders will own 60% of the shares in the company, while Tokopedia will own the rest of the merged company. The joint entity whose value could range from US$ 35 billion to US$ 40 billion is also said to be planning to list its shares on the Indonesia Stock Exchange (IDX).

Regarding the news, Tokopedia’s VP of Corporate Communications, Nuraini Razak said, “the news is inaccurate and purely speculative. If there is a corporate action, we will inform the media.” Previously, on February 12, 2021, Nuraini also stated the same thing when contacted by Liputan6.com. “We are unable to respond to the speculation that is on the market.”

Gojek-Tokopedia Valuation is Estimated to Reach IDR 504 Trillion

Two Indonesian startup unicorns, Gojek and Tokopedia, have reportedly signed a conditional sales and purchase agreement (CSPA). Because of that, both are said to be getting closer to a merger agreement, according to a report from D-Insights.

Quoting DealStreetAsia, Wednesday (10/3/2021), D-Insight estimates that if the merger actually occurs, Gojek-Tokopedia’s valuation value will reach USD 35-40 billion, equivalent to IDR 504-576 trillion. With this figure, Gojek-Tokopedia will become the company with the third-highest valuation value in Indonesia after Bank BCA and BRI.

The D-Insight report also states that when the merger occurs, Gojek will control 60 percent of the shares of the merged entity and Tokopedia 40 percent. However, when confirmed, Tokopedia’s VP of Corporate Communications Nurani Razak said, “The news is inaccurate and purely speculative. If there is a corporate action, we will inform the media.”

Last month, DealStreetAsia also reported that Gojek appointed Goldman Sachs as an advisor for the merger negotiations with Tokopedia. The agreement between Gojek, which is valued at USD 10.5 billion and Tokopedia, which has a valuation of USD 7.5 billion, is predicted to be an agreement with the greatest value in Indonesia, in the technology sector.

Moreover, the two companies have the same investors, namely Google, Temasek Holdings, and Sequoia Capital India. With this merger, the two companies will be more serious about offering their shares on the stock exchange.

Potential When Gojek-Tokopedia Merger

In December 2020, Tokopedia appointed Morgan Stanley and Citigroup as advisors for the IPO. Gojek itself was previously reported in talks with Grab regarding a possible merger. However, until now the agreement has never been actually announced to the public. Now, by joining Tokopedia, Gojek can expand its access to the public.

With Tokopedia’s e-commerce business portfolio, the two companies will both be able to expand their attractiveness to investors. For Tokopedia, the merger with Gojek is considered to help increase the valuation value in the capital market and make its competitive position stronger in facing competitors such as Shopee.

According to an economic observer from the Institute for Development of Economics and Finance (INDEF) Bhima Yudhistira, the map of competition for both the e-commerce and ride-hailing businesses will not change if Gojek merges with Tokopedia.

According to him, Tokopedia will still compete against Shopee and Lazada in the e-commerce realm, while Gojek will also continue to compete with Grab in the realm of ride-hailing and food delivery. Likewise with Gopay, which has to compete with ShopeePay, OVO, and LinkAja in the realm of digital payments.

With the ongoing economic downturn, it is likely to present a major challenge for the merged entity to gain profits in the short to medium term. In fact, after joining, Gojek and Tokopedia will probably enter their biggest battle arena.