Biggest SPAC merger till date; Singapore’s Grab announces deal worth $40bn

By Sayujya S, Desk Reporter
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Grab, Southeast Asia’s biggest ride-hailing and food delivery firm, announced that it is set to go public through a SPAC merger with US-based special purpose investment vehicle Altimeter Growth Corp in a deal that values the company at $39.6 billion, marking the largest blank-check merger to date.

Grab says it intends to list on the Nasdaq (American stock exchange) under ticker symbol GRAB following the deal’s completion.

SPAC

Special purpose acquisition companies or SPAC are shell companies listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional IPO process.

As part of the deal, Japan’s SoftBank-backed Grab will receive about $4.5 billion in cash, which includes $4 billion in a private investment in public equity arrangement, managed by BlackRock, Fidelity, T. Rowe Price, Morgan Stanley’s Counterpoint Global fund and Singapore’s sovereign wealth fund Temasek.

The proposed deal, which have been approved by the boards of both Grab and Altimeter Growth, is expected to close over the next few months, subject to shareholder approvals.

The record valuation validates Grab’s co-founder Anthony Tan’s strategy to aggressively tap growth in new sectors and ramp up market share by pumping billions of dollars to localize its services and invest in high-growth economies.

The listing will also give Grab extra power in its main market, Indonesia, where local rival Gojek is close to sealing a merger with the country’s leading eCommerce business, Tokopedia.

Grab’s rapid growth in recent years

Grab offers an array of digital services such as transportation, food delivery, hotel bookings, online banking, mobile payments and insurance services from its app and thus enjoys the title of being a “super app.” It operates in most of Southeast Asia, serving more than 187 million users in over 350 cities across eight countries.

Grab attracted global attention in 2018 when it acquired US-based Uber’s Southeast Asia business after a costly five-year battle and in return took a stake in the company.

The company, whose net revenue surged 70 percent last year, has yet to turn profitable, but it expects its biggest segment, the food delivery business, to break even by end-2021, as more consumers shift to online food delivery after the COVID-19 pandemic.

Related: India’s Flipkart considers quicker US IPO with SPAC


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