Grab Holdings’ proposed multibillion-dollar acquisition of GoTo Group has run into fresh complications, with negotiations stalling over Telkomsel’s stake in the Indonesian technology firm.

Talks have snagged over Telkomsel’s roughly 2% holding in GoTo, which the Indonesian wireless carrier is unwilling to sell at current valuations, according to people familiar with the matter.

Telkomsel, majority-owned by state-controlled Telkom Indonesia, invested at significantly higher price levels and is concerned about crystallising losses tied to state capital, which could carry legal implications under Indonesian law, Bloomberg reported.

Telkomsel can retain its stake and is using the potential takeover to negotiate a higher price.

Grab is pushing to secure support from all major Indonesian stakeholders, since the government must approve any deal.

The Telkomsel issue adds to a series of hurdles that have delayed Grab’s long-running efforts to merge with GoTo, including regulatory scrutiny and disagreements over valuation.

Antitrust concerns are likely, given that a combination would unite South-east Asia’s two largest ride-hailing players.

Indonesian policymakers have also raised concerns about fare increases, job losses and the loss of a national technology champion to a foreign buyer.

Telkomsel invested US$300 million in GoTo in 2021, on top of a US$150 million convertible bond the previous year.

A sale at current market prices would result in losses of hundreds of millions of dollars, the sources said.

GoTo’s valuation stands at about US$4.2 billion, while Grab’s market capitalisation is US$18.5 billion. Negotiators are still discussing alternative structures, but they have not reached an agreement.

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