A new chief executive officer has been appointed by the GoTo Group, succeeding Patrick Walujo. This change is anticipated to accelerate Grab Holdings Ltd.'s acquisition of Indonesia's largest internet firm.
TL;DR
- GoTo Group appointed Hans Patuwo as CEO, succeeding Patrick Walujo, pending shareholder approval.
- This leadership change may accelerate Grab Holdings Ltd.'s acquisition of GoTo Group.
- The transition could signal a pivot towards operational focus and revive stalled Grab-GoTo merger talks.
- Danantara, Indonesia's sovereign wealth fund, may take a minority stake in a combined entity.
Hans Patuwo, the chief operating officer, is set to assume leadership from Walujo, the company announced on Monday. This appointment, pending shareholder approval, follows a push by GoTo's co-founders and significant investors, such as SoftBank Group Corp., for Walujo's removal due to poor stock results.
This shift signifies a complete reversal for GoTo, as they announced in January that Walujo, aged 50, would lead the company for the foreseeable future. The former investment banker was instrumental in guiding the Indonesian ride-hailing and delivery behemoth to its initial profitability during his two-and-a-half-year term as CEO. However, the company's valuation plummeted by over 40% during that same timeframe, and he also resisted a takeover bid from Singapore's Grab.
Shares of GoTo climbed as much as 6.3% in Jakarta Monday, giving the company a market value of about $5 billion. Grab, traded in New York, has a market capitalization of $20 billion.
“The transition could signal a pivot towards operational focus and revive the long-stalled proposed Grab-GoTo merger,” Citigroup Inc. Analysts Ferry Wong and Ryan Davis wrote.
Patuwo, aged 49, is poised to lead a firm struggling with ongoing difficulties, facing a worldwide transition to artificial intelligence, and gearing up to resume negotiations with Grab. The possibility of an acquisition, following intermittent discussions over several years, is growing after the Indonesian government announced it's in talks with both companies regarding an agreement.
Danantara, the nation's sovereign wealth fund, is slated to receive involved as part of a strategy to merge the companies. Sources close to the situation indicated in June that the fund initiated discussions about acquiring a minority interest in a consolidated firm at the start of this year.
The company's participation might ease worries about consumers facing disadvantages from the union of the nation's top two ride-sharing services. “Danantara’s possible minority stake in a potential combined entity would serve as both a symbolic and structural safeguard of national interest,” and would help alleviate worries about a monopoly, according to Citigroup's analysts.
Patuwo came to the firm over seven years back from An Indonesian group, as per his LinkedIn profile. He began at the ride-hailing division Gojek, fostering connections with drivers and vendors and growing its reach nationwide. Patuwo subsequently took charge of payments and financial services.
In addition to other leadership adjustments, GoTo announced the appointment of co-founder Andre Soelistyo to its board of commissioners. Within Indonesia, company commissioners generally operate as a distinct entity from directors, fulfilling a role akin to a steering committee for issues such as corporate governance.
Soelistyo, who led the company prior to Walujo's appointment, facilitated the merger between Gojek and the e-commerce business Tokopedia, establishing Indonesia's largest internet enterprise. Before this role, he served as an executive director at Northstar Group, Walujo's previous private equity company.
GoTo's shareholders are scheduled to cast their votes on several issues, such as the change in leadership, during a special general meeting set for December 17th.