The merger will help Grab gain a listing on NASDAQ in the US
Grab has revealed plans to merge with Altimeter Growth, a US-based special purpose acquisition company (SPAC), in a deal that values the combined company at around $39.6bn.
The deal will enable the Singapore-based ride-hailing and food delivery company to become a publicly listed company in the US, with trading on NASDAQ.
Grab provides a variety of on-demand services in 428 cities across eight countries, which include mobility, food, grocery, and package delivery services, and also mobile payments and financial services.
The countries where the company operates include Singapore, Indonesia, Cambodia, Malaysia, Thailand, the Philippines, Myanmar, and Vietnam.
Grab’s move to become a public company is said to have been influenced by its financial performance in 2020. The company said that in spite of Covid-19, it had posted gross merchandise value (GMV) of around $12.5bn in 2020, which had surpassed the pre-pandemic levels, while more than doubling from 2018.
Grab group CEO and co-founder Anthony Tan said: “It gives us immense pride to represent Southeast 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.
“It was very challenging for us too, but it taught us immensely about the resiliency of our business. Our diversified superapp strategy helped our driver-partners pivot to deliveries, and enabled us to deliver growth while improving profitability.
“As we become a publicly-traded company, we’ll work even harder to create economic empowerment for our communities, because when Southeast Asia succeeds, Grab succeeds.”
Post-merger, the enlarged Grab could realise cash proceeds of around $4.5bn. These include over $4bn from a fully committed private investment in public equity (PIPE).
Apart from the PIPE, Altimeter Growth will make a contingent investment of $500m. Altimeter Growth is sponsored by technology-focused investment firm Altimeter Capital Management.
Funds managed by Altimeter Capital Management led the PIPE with the commitment of $750m.
Other PIPE investors are funds and accounts managed or advised by BlackRock, T.Rowe Price Associates, Counterpoint Global (Morgan Stanley Investment Management), Fidelity International, Temasek, Djarum, the Sariaatmadja family, and Sinar Mas.
Altimeter founder and CEO Brad Gerstner said: “As one of the world’s largest and fastest-growing internet companies, Grab is paving the digital path forward for the 670 million citizens of Southeast Asia.
“We are thrilled that Grab selected Altimeter Capital Markets as their partner to go public and even more excited to become sizable long term owners in this innovative, mission driven company.”
The proposed merger has been approved by the boards of Grab and Altimeter Growth. Subject to shareholder approvals and other customary closing conditions, the merger is anticipated to close in the coming months.