Grab to list in US through record $53.2 billion Spac deal with Altimeter

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The merger is expected to provide up to US$4.5 billion in cash proceeds to Grab.

Grab to list in US through record $53.2 billion Spac deal with Altimeter

Choo Yun Ting

SINGAPORE – South-east Asian ride-hailing and food delivery giant Grab Holdings is intending to go public in the United States through a merger with US-based Altimeter Growth Corp, it announced on Tuesday (April 13).

Its partnership is expected to be the largest-ever US equity offering by a South-east Asian company, with the proposed transaction giving Grab a market value of around US$39.6 billion (S$53.2 billion). 

The 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 added in a press statement.

The combined firm expects its securities to be traded on the tech-rich Nasdaq Composite Index in the coming months.

Grab group CEO 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’s formal announcement on Tuesday comes after recent media reports that it was in talks with Altimeter on a Spac merger to list in the US.

The cash proceeds to Grab include more than US$4 billion from a fully committed private investment in public equity, which was led by Altimeter Capital Management and included Singapore state investor Temasek and leading family groups from Indonesia.

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

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

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 South-east Asia. “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.”

Altimeter has also committed up to US$500 million to a contingent investment to be equal to the aggregate dollar amount of redemptions from the Spac’s shareholders. It has a three-year lockup period for its sponsor shares and is also contributing shares to Grab’s GrabForGood fund, which looks to introduce programmes with long-term social and environmental impact. 

Mr Tan said that this demonstrates the aligned values which the two companies share: “They’re joining our journey for the long-run, together with an incredible day one cap table of renowned institutional investors and sovereign wealth funds. 

“This is testament to the global investment community’s belief in the long-term value proposition of Grab’s superapp strategy and the exciting growth potential of South-east Asia.”

In its statement, Grab said that its decision to go public was driven by its strong performance last year despite the pandemic. It posted gross merchandise value of approximately US$12.5 billion last year, which surpassed pre-pandemic levels and more than doubled from 2018. In January, Grab said its revenue grew some 70 per cent year-on-year in 2020, and that it expects its food delivery business to break even by the end of 2021. 

 

 

The proposed transactions, which have been approved by the boards of directors of both Grab and Altimeter Growth, are expected to close in the coming months, subject to shareholder approvals and other customary closing conditions. 

Evercore, JP Morgan and Morgan Stanley Asia (Singapore) advised Grab in the deal.

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