Singapore Competition Watchdog Yet to Receive Formal Notification on Grab-GoTo Merger

Singapore’s Competition and Consumer Commission (CCCS) has stated that it has not yet received any formal notification regarding a potential merger between ride-hailing and delivery giants Grab and GoTo, according to a Reuters report. The statement follows widespread media speculation about a possible tie-up between the two Southeast Asian companies.

According to a statement from CCCS, the regulatory body has acknowledged reports of ongoing discussions between Grab and GoTo. It has advised both companies to seek legal guidance to ensure compliance with Singapore’s competition laws before proceeding with any potential merger. Per the statement, CCCS remains open to engagement through its established merger notification and pre-notification processes.

Reports suggest that Singapore-based Grab, which is backed by Uber, and Indonesia’s GoTo have been in talks regarding a possible consolidation. However, GoTo reaffirmed on Wednesday that no definitive agreement has been reached, following claims that Grab had initiated due diligence for a potential acquisition.

If a merger were to proceed, the combined entity would hold a commanding market share in the region, accounting for nearly 90% of Singapore’s ride-hailing market and over 91% in Indonesia, according to data from Euromonitor International. Such a scenario could raise significant competition concerns, given the dominant position the merged firm would assume in Southeast Asia’s ride-hailing sector.

CCCS has previously demonstrated its commitment to maintaining competitive market conditions. In 2018, it imposed a fine of S$13 million (US$9.76 million) on Grab and Uber after their merger was found to have significantly reduced competition in Singapore. At the time, Grab was penalized for failing to notify the regulator of the transaction.

Under Singaporean competition laws, CCCS has the authority to levy fines of up to 10% of a company’s annual turnover in Singapore for each year of infringement, with a cap of three years. Additionally, the regulator can mandate corrective actions, such as requiring companies to reverse mergers or implement remedies to mitigate anti-competitive effects. In certain cases, CCCS may also impose interim measures to preserve market competition.

In a related development last year, Grab scrapped its plans to acquire Trans-cab, Singapore’s third-largest taxi operator, highlighting the regulatory complexities involved in major consolidation efforts within the industry.

Source: Fintech News