GoTo has denied news reports that the Indonesian ride-hailing and e-commerce giant is again discussing a potential merger with Singapore-based rival Grab Holdings, a move that could pose significant regulatory hurdles.

Shares of Grab Holdings slid over 2% in premarket trading.

“There is no agreement between the company and any party to enter into a merger transaction of the type that had been reported in the mass media,” GoTo said in a statement to the Indonesia Stock Exchange. “The company notes that similar reports have circulated occasionally in the past several years and are based on speculation.”

Shares of GoTo retreated in Jakarta trading, sliding 3.4% after surging 7.4% on Tuesday. Nasdaq-listed Grab jumped 12.6% overnight in New York after Bloomberg reported that Grab is weighing a takeover of GoTo at a valuation of more than $7 billion.

While a merger would help the two loss-making companies become profitable faster, analysts say it would be challenging for the proposed merger to get regulatory approval.

“This merger will create a stronger technology giant in Southeast Asia, reduce direct competition, and increase operational efficiency,” Hendra Wardana, founder of Indonesian research firm Stocknow.id. “However, behind this euphoria, major challenges such as antitrust regulations and difficulties in integrating corporate culture remain risks that must be taken into account.”

In the meantime, GoTo has been restructuring its operations to accelerate its path to profitability. In December 2023, it agreed to combine its e-commerce division, Tokopedia, with ByteDance’s TikTok Shop Indonesia, making TikTok a controlling shareholder of the joint venture with an investment of $1.5 billion.