Indonesian media and technology giant Elang Mahkota Teknologi Tbk, or the Emtek Group, has increased its stake in the Southeast Asian super app Grab’s local unit and is now engaged in discussions on how the two can co-operate.
In a transaction dated June 30, the Emtek Group picked up 311.27 million new shares of PT Grab Teknologi Indonesia (PT GTI) — the legal name of Grab’s local unit — for $210 million, amounting to a 3.29% stake in the company, showed a company filing to the Indonesia Stock Exchange (IDX) on Friday.
The Emtek Group had entered PT GTI’s cap table in April this year with the acquisition of a minority stake in the unit, DealStreetAsia had reported. With the latest deal, Emtek has bolstered its total stake in PT GTI to 5.88% of the total paid-up and issued capital. Emtek’s stake is valued at $226.91 million, compared with a value of $16.91 million for its previous shareholding.
“The transaction will support the main business activities and strengthen the company’s position as a leading technology and digital company in Indonesia and enrich its digital ecosystem,” Titi Maria Rusli, corporate secretary of Emtek, said in a statement following the stake purchase.
Emtek’s latest stake purchase is a clear sign of its deepening alliance with Grab, which is currently in the throes of meeting regulatory compliances to list on the Nasdaq following its $40 billion merger with the SPAC company Altimeter Growth in April.
Indonesia’s Sariaatmadja family, the biggest shareholder in Emtek with a nearly 23% stake, is participating in the $4 billion private investment in public equity (PIPE) deal that is part of the SPAC merger.
Grab itself had acquired a 4.6% stake in Emtek Group in March, when the latter raised 9.3 trillion rupiah ($635 million) through the issue of new shares in a private placement. Emtek’s share sale had also witnessed participation from South Korea’s NAVER Corp, Ashmore Asset Management Indonesia, and Manulife Aset Manajemen Indonesia.
Given the cross-holdings, it seems natural that Grab and Emtek are now engaged in talks on how to collaborate better and align their business interests. Speaking exclusively to DealStreetAsia, vice president-director at Emtek Group, Sutanto Hartono said that the firm is intensely discussing the possibility of synergies with Grab Indonesia’s country managing director Neneng Goenadi.
“The discussion is ongoing, and there must be something that can be done together. If [it only creates] small use cases, what’s the point [in collaborating]? But if you can bundle and succeed, why not? Data becomes pivotal for collaboration… to understand user behaviour… so that it can give a higher accuracy in providing services,” Hartono said.
Hartono added that the Grab investment is a strategic one for the Emtek group, rather than a mere financial one.
Emtek, which has interests in the media sector, also owns the video-on-demand platform Vidio.com, through its subsidiary PT Surya Citra Media Tbk.
When asked if Emtek will embed Vidio on the Grab platform, Hartono said, it is also part of the discussion.
In 2019, Grab Indonesia had partnered with the Singapore telecom major Singtel’s video-on-demand platform HOOQ to onboard new users to the Grab platform. HOOQ, however, filed for liquidation in Singapore last year, as the company couldn’t generate a healthy financial performance nor provide sustainable returns.
Meanwhile, Vidio has surged in popularity since COVID-19 struck last year. Emtek claims that Vidio became the top Over The Top (OTT) platform in any sector on the Google PlayStore in April 2020. Besides original series and sports content, the platform also offers free-to-air TV content from television channels, including SCTV and Indosiar.
Emtek and Grab exploring business ties assumes greater significance against the backdrop of Indonesian homegrown superapp Gojek merging with the online marketplace Tokopedia in May.
Emtek is an investor in the e-commerce unicorn Bukalapak, which is preparing for a public listing on the IDX this month.
It also has interests in the payments app DANA, while Grab is a backer of OVO, both of which compete with Gojek’s GoPay. Emtek may be looking at increasing its presence in financial services as it is in talks to pick up a stake in Jakarta-headquartered Bank of India Indonesia Tbk (BSWD), DealStreetAsia reported last week.