Malaysian budget carrier AirAsia Group has said that it will buy Indonesian ride-hailing and payments firm Gojek's Thailand business in a stock swap, giving Gojek a 4.76% stake in the airline's lifestyle platform.
AirAsia will acquire Gojek's business in return for $50 million worth of shares in AirAsia SuperApp, valuing the division at approximately $1 billion, more than the COVID-19 pandemic-hit airline's current market value of $868 million at a time when it has been looking to raise more capital.
The agreement with the Indonesian startup unicorn comes just a week after AirAsia applied for a digital banking licence in Malaysia, signalling a shift in focus towards digital business as most of its fleet remains grounded amid coronavirus restrictions.
"By taking on Gojek's well-established Thai business, we'll be able to turbo-charge our ambitions in this space," AirAsia chief executive Tony Fernandes said in a statement.
AirAsia SuperApp offers travel, e-commerce and financial services and is one of three companies under the AirAsia Digital group. The others are logistics venture Teleport and the BigPay fintech business.
AirAsia could give Gojek a boost in Thailand where the startup has lagged food delivery and ride-hailing competitors, Nattabhorn Juengsanguansit, director at Thai business consultancy Asia Group Advisors, said,
"But the venture faces stiff competition in food delivery from the likes of Line Man, which received a major capital boost last year. [Singapore's] Grab has strong position in ride-hailing and Estonia's Bolt is growing its market share," she said.
Gojek's Thai business, which includes ride-hailing, food delivery and payments, is its smallest overseas operation and has a far smaller share of that market than food delivery leader Grab.
Gojek will focus on increasing investment in Vietnam and Singapore after the deal is completed, the statement said.
"We looked at where we could really commit the resources in order to ensure that our teams have a path towards market leadership, and we see that in Vietnam and Singapore, and hence our commitment there is as strong if not stronger than ever," Gojek CEO Kevin Aluwi told reporters.
Gojek's plans for an initial public offering (IPO) are proceeding though the focus on the two markets was not directly related to its IPO pursuit, he added.
Gojek's Thai business made a loss in 2019 and 2020, according to accounts provided with the deal announcement.
Nikkei Asia earlier reported that AirAsia was in talks with Gojek to acquire its Thai business.
Fernandes told reporters that BigPay was near closing a transaction while the group could be making announcements on its fundraising initiatives next week. He did not share details.
"AirAsia will be making some announcements, I hope, next week, regarding financing and...the Danajamin loan is being processed as we speak," he said, referring to a government-guaranteed loan the airline has sought for months.
In March, Fernandes told a local weekly that the airline could secure one billion ringgit ($240.62 million) in bank loans and in April the group expects to see clarity on its fundraising in two to three months.
AirAsia has been looking since last year to raise up to 2.5 billion ringgit ($600.96 million) to weather the pandemic-induced slump in global travel.
AirAsia Targets $300m Raise Via US Listing Of Its Digital Business
AirAsia is considering a listing of its digital arm via a special-purpose acquisition company (SPAC) in the United States to raise at least $300 million, its chief executive said on Wednesday July 7.
Fernandes told Reuters in a virtual interview that a few SPACs focused on technology have approached the group, and AirAsia has engaged auditors for a deal to list the unit, which comprises a travel and lifestyle services platform, logistics and fintech businesses.
"We have now recruited our auditors to start preparing for an American listing so that's very much on the table," he said, adding that Rothschild is working on the listing that could happen in five months.
The group is also in discussions with other suitors, including Malaysian and Indonesian private equity, Fernandes added.
Mergers and acquisition activity and SPAC deals have surged in Asia, with south-east Asia's largest ride-hailing and food delivery firm, Grab, heading for a US listing via a hefty $40 billion merger with a SPAC.
Fernandes, wearing a bright red cap with the words "Make AirAsia Fly Again", also said that talks with an US company over a loan of $1 billion for the digital business is also near conclusion, with a term sheet already prepared.
Fernandes said that the group could announce updates on its financing as soon as next week, and that a government-guaranteed loan was also being processed.
Separately at another virtual briefing, AirAsia said that Thai AirAsia will list on the local stock exchange in about three to four months.