- Tram Ho
According to information from the Nikkei, Grab has made a request that founder Anthony Tan will be the “lifetime CEO” of the company after the merger with Gojek. Both are currently super apps in Asia and they are reportedly in the middle of negotiating a merger.
Grab is offering many conditions for the merger, including giving CEO Tan a sufficiently large voting power in the company, veto power over the decisions of the board of directors as well as affecting the salary and bonuses of the company. self.
Other conditions were also offered, such as “who is appointed and what the conditions are, as well as the new CEO of the corporation in the event of Tan’s death,” an anonymous source said.
The above requirements, if approved, would give Mr. Tan considerable strength in the post-merger company and that raises concerns among investors as they are looking forward to the potential for an IPO. Some investors have even urged the merger to quickly go public as soon as the deals are signed.
The Nikkei also acknowledged that Grab recently went on to explain to relevant investors that their proposal was misinterpreted during the negotiations. And that the merged legal entity will be operated in the direction of complying with the regulations on IPO.
Grab seems to have an advantage in this merger negotiation process because it is priced higher than Gojek and operates in more markets. One source of disagreement said that while the deals were still going on, one of the biggest disagreements was the post-merger company’s shareholder structure. One said Gojek asked for a 40% stake, an amount that Grab believes is “fundamentally too much” given that it itself has a better financial position including revenue.
Grab and Gojek have been negotiating for nearly a year with investors on both sides and are looking forward to the merger, especially when they see shares of Sea – a major technology company in the region rise. 5 times since the beginning of the year.
Grab’s demands, identified by the Nikkei, clearly reflect the strategy of Softbank, its biggest shareholder. Softbank’s Vision Fund has invested $ 3 billion here.
Softbank and the Vision Fund sometimes hold large stakes in companies but leave the founders in control. And while increasing capital might dilute a founder’s stake, Softbank still allows the companies it invests under the founder’s control. It also protects the Japanese company from incurring liabilities if the investment becomes difficult.
But giving unfair control to the founder has come under heavy criticism since Wework, a company that also received investment from Softbank, attempted an IPO last year. WeWork initially said co-founder Adam Neumann would own 20x more voting rights with common shareholders and that his wife would also play a role in appointing a successor if he dies. However, the IPO eventually collapsed and WeWork’s value dropped the most in history.
Softbank leaders are discussing with CEO Tan about these terms. Details of the deal between Grab and Vision Fund have not been announced yet. Records show that a Softbank subsidiary owned 22% of Grab Holdings but did not have the right to vote in 2018. Softbank later transferred the shares to Vision Fund.
The investors behind Grab and Gojek are looking to accelerate the merger but the two companies themselves are still divided and a final deal is still months away. It is also possible that both companies will refuse to sign the agreement.
Although the two unicorns agree to merge, the monopoly issue is also examined. In Indonesia’s most important market – the two still dominate both ride-hailing and food delivery. A government official told Nikkei earlier that: “The government wants strong competition between the two companies to continue because that can create a balance in the market. Consumers may suffer losses.
Source : Genk