JAKARTA, Nov 7 (Reuters) - Indonesia is discussing a

possible merger or acquisition between ride-hailing and food

delivery firm Grab and its rival GoTo, the

presidential spokesperson said on Friday.

The government considers the ride-hailing industry as

strategic for job creation and vital to the economy. GoTo's

Gojek unit alone has more than 3.1 million online riders, and

GoTo and Grab have dominated the Indonesian market for years.

A combined entity would hold a market share of over 91% in

Indonesia, according to data analytics company, Euromonitor

International.

Indonesian government spokesperson Prasetyo Hadi said a

decision would come soon.

"Online riders are economic heroes, driving the economy," he

said.

Grab and GoTo did not immediately respond to request for

comments.

Reuters has previously reported that Nasdaq-listed Grab was

looking to strike a deal to buy smaller rival GoTo in the second

quarter this year and had hired advisers to work on the proposed

acquisition. A deal could value GoTo at around $7 billion, a

source close to the matter said earlier this year.

GoTo is 73.90%-owned by foreign investors, including

SoftBank Group and Taobao China Holding, a unit of

China's Alibaba Group, with the rest owned by

Indonesian investors, according to its 2024 annual report.