Grab plans US listing via $53b merger deal

South-east Asian ride-hailing and food delivery giant Grab Holdings intends to go public in the United States through a merger with US-based Altimeter Growth Corp, it announced yesterday.

This partnership is the biggest blank-cheque company deal on record, and the proposed transaction will give Grab a market value of about US$39.6 billion (S$53.1 billion).

Grab's merger with the special purpose acquisition company (Spac) of investment firm Altimeter Capital Management is expected to provide up to US$4.5 billion in cash proceeds to Grab, the Singapore-headquartered company said in a press statement.

The combined company expects its stock to be traded on the tech-heavy, growth-oriented Nasdaq in the coming months.

Grab's merger with a Spac, or blank-cheque company, offers it a quicker way to list than a traditional initial public offering. Spacs are formed specifically to raise capital through an IPO to acquire an existing company and, with much of the funding in the bag, reduce the need for time-consuming roadshows.

Grab group chief executive and co-founder Anthony Tan said: "It gives us immense pride to represent South-east Asia in the global public markets. This is a milestone in our journey to open up access for everyone to benefit from the digital economy. This is even more critical as our region recovers from Covid-19."

Grab is set to be the first South-east Asian tech unicorn to go public through a Spac, a move that is seen as a big win for its early backers SoftBank Group and Didi Chuxing.

The new funds raised by Grab include more than US$4 billion from a fully committed private investment in public equity that was led by Altimeter Capital Management and included Singapore's Temasek and leading family groups from Indonesia.

Other participants include investment management firms BlackRock, T. Rowe Price Associates and Fidelity International, and United Arab Emirates sovereign wealth fund Mubadala.

Altimeter is putting US$750 million into the company, representing about one-fifth of the new funds raised.

Altimeter founder and chief executive Brad Gerstner said: "We are thrilled that Grab selected Altimeter Capital Markets as their partner to go public and even more excited to become sizeable long-term owners in this innovative, mission-driven company."

Cathay Innovation investment director Rajive Keshup said that Grab's deal speaks to the importance and potential of South-east Asia's start-up ecosystem. "We expect a lot more capital to flow into the region on the back of this mega announcement - and that is a very good leading indicator about the health of the region," he said.

In its statement, Grab said its decision to go public was driven by its strong performance last year despite the pandemic. It posted gross merchandise value of about US$12.5 billion last year, which surpassed pre-pandemic levels and more than doubled from 2018. In January, it said its revenue grew about 70 per cent year on year in 2020, and that it expects its food delivery business to break even by the end of this year.