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Indonesia’s Gojek and Tokopedia are talking about merging ahead of an IPO.

Indonesia’s ride-hailing and payments giant Gojek is in advanced discussions about merging with local e-commerce pioneer PT Tokopedia, ahead of a planned initial public offering of the combined entity, according to people with knowledge of the matter.

“The country’s two most valuable start-ups have signed a detailed term sheet to conduct due diligence of each other’s business,’’ said the people, who asked not to be named as the discussions are private.

“Both sides see potential synergies and are keen to close the deal as soon as possible in coming months,’’ they said.

The merged entity would create an Indonesian internet powerhouse with a combined valuation of more than $18 billion. Its businesses range from ridehailing and payments to online shopping and delivery — a local mashup of Uber Technologies Inc, PayPal Holdings Inc, Amazon.com Inc, and DoorDash Inc. It plans to go public in the United States and Indonesia.

“This is potentially a blockbuster deal,” said Usman Akhtar, a partner at Bain & Co in Singapore. “The deal would have a lot of impact outside of these two companies and have ripple effects that aren’t even all known right now.”

“Gojek and Tokopedia have considered a potential merger since 2018, but discussions accelerated after deal talks between Gojek and arch-rival Grab Holdings Inc reached an impasse,’’ the people said.

“Grab chief executive Anthony Tan continues to resist pressure from SoftBank Group Corp’s Masayoshi Son to give up some control in a combined entity with Gojek,’’ they said.

Southeast Asia’s two most valuable start-ups — together worth about $25 billion — held on-and-off talks to combine after years of fierce competition in ride-hailing, food delivery and financial technology.

As recently as December, the companies were said to have made substantial progress in working out a deal to combine, people with knowledge of the talks told Bloomberg News at the time. But they clashed over how to manage Indonesia, the key market in the region.

Representatives of Gojek and Tokopedia declined to comment.

The firms are valued at about $10.5 billion and about $7.5 billion, respectively, according to people familiar with their accounts, and merger ratios are currently under discussion.

Founders of the two companies have been friends since their inception more than 10 years ago and anticipate an amicable alliance.

A deal between Gojek and Tokopedia is likely to face less regulatory opposition than the deal previously under consideration.

The combination of Grab and Gojek would reduce competition in ride-hailing, delivery and digital payments in Southeast Asia, a prospect over which government officials have already expressed reservations.

Gojek and Tokopedia are contemplating several options for a public offering. They could choose a traditional IPO in Indonesia and the US or work with a blank-cheque company for the US listing, one of the people said.

“A handful of blank-cheque companies have held discussions with the two companies in recent months,’’ the person said.