Jakarta Wants the Grab-GoTo Merger. It's Putting It in a Decree.

The romance is back on. Or perhaps it never left. Either way, after what feels like a thousand years of will-they-won’t-they, the rumored merger between ride-hailing giant Grab and Indonesian tech firm GoTo appears to have picked up an unusual suitor: the Indonesian government itself.

That’s the situation as it now stands. Talks of a merger between the two companies intensified recently after Jakarta reportedly threw their own hat into the ring.^[1] And things heated up further when news broke that investors in GoTo want to oust the company’s current chief executive.^[2] The ostensible reason? He opposes the merger with Grab.^[3]

For those keeping score at home, the current GoTo CEO joined the company in 2023^[4] and has since overseen a roughly 40 percent decline in the company’s market value during his tenure.^[5] In his defense — and this is offered in the spirit of fairness, not advocacy — managing a public company through the post-pandemic correction in regional tech valuations is not the easiest assignment in the world. In his non-defense, his private equity firm was also an investor in another Indonesian startup, which was apparently sold off for pennies on the dollar earlier this year.^[6][7] Make of that what you will.

Now, the part that I find genuinely worth paying attention to. The Indonesian government is reportedly so keen on a Grab-GoTo merger that it is being included in a future presidential decree.^[8] A presidential decree. Not a regulatory guidance. Not a press release. Not even a strongly-worded ministerial statement. A presidential decree — the same instrument the constitution reserves for matters of state importance. And as a bonus, the same decree also outlines new rules for ride-hailing drivers.^[9]

That second part is worth sitting with for a moment. Indonesia’s executive branch is, according to reporting, prepared to bundle the corporate future of two of the region’s largest technology companies into a single legal document that also sets terms for the drivers who actually use the apps. I did not make that up.

Then there is Danantara (Badan Pengelola Investasi Daya Anagata Nusantara), Indonesia’s sovereign wealth fund. Danantara reportedly manages a company that owns a company that owns stakes in GoTo.^[10] I will leave the nesting-doll structure exactly as it has been described, because elaborating on it would require knowing things I do not. But if Danantara had its way, the fund would also be holding stakes in the merged entity.^[11] Not, one assumes, for the cultural value.

The stated rationale, if one is being offered, is the potential dividends for the state coffers. The unspoken rationale, if one is being frank, is leverage. A sovereign wealth fund with a seat at the cap table of a merged Grab-GoTo entity is, by definition, a sovereign wealth fund that can ask the merged Grab-GoTo entity to be more aligned with government policy.^[12] That is not a conspiracy theory. That is what ownership is.

There is, of course, a small awkwardness. A majority of GoTo is reportedly not owned by Indonesia.^[13] An Indonesian tech champion effectively controlled by foreign capital, with the Indonesian state as a junior partner and the Indonesian government publicly lobbying for the deal, is not, historically, a posture that plays well in domestic political messaging. The government’s solution appears to be to simply buy a bigger slice once the merger closes. Whether the market, the regulators, or the existing shareholders find that as straightforward as the decree-drafters do is, of course, an entirely separate matter.

And so the picture assembles itself. The state wants the merger. The state is prepared to enshrine the merger in a presidential decree. The state’s sovereign wealth fund is, in the words of one anonymous observer who is me, “nesting-doll close” to a controlling stake. The CEO of one of the merging parties disagrees, and is now reportedly being pushed out by his own investors for his trouble.

Which, finally, brings us to the elephant in the room, which I have not mentioned by name and will continue to not mention by name: the line between a sovereign wealth fund and a policy arm of the state. Danantara is, structurally, an investment vehicle. The presidency is, structurally, the executive. The decree is, structurally, a legal instrument. Whether the three should be touching each other on matters of corporate strategy is a question that, evidently, nobody in the relevant drafting rooms is being paid to ask.

I have, by design, oversimplified the subject. The Grab-GoTo file is a multi-jurisdictional corporate matter, and there are lawyers, presumably, who are being paid a great deal of money to think about it more carefully than I am.

But the broad shape of it is this. The government wants the deal. The government is willing to write the deal into a decree. The government already holds a piece of one of the parties through a chain of state-owned vehicles. The CEO of that party is opposed. The CEO’s investors are no longer. The decree is still being drafted.

The ride-hailing drivers, presumably, will get to read it in the same sitting.