Grab to list in US via $40 bln merger with Altimeter Growth

HONG KONG — Southeast Asia’s largest ride-hailing company, Grab Holdings, said today that it plans to merge with U.S.-based Altimeter Growth Capital in a deal that would value it at nearly $40 billion in preparation for an initial public offering in the U.S.

That would make it the largest SPAC merger ever, more than double current record-holder United Wholesale Mortgage’s $16 billion merger in January.

Grab’s agreement to list via a special purpose acquisition company, or SPAC — a shell company set up with the aim of raising money through an IPO to acquire another company — already has drawn more than $4 billion in private investment in public equity from a group of investors including Fidelity International and Singapore’s Temasek Holdings.

At closing, the combined company is expected to receive about $4.5 billion in cash proceeds and will be valued at about $39.6 billion, according to a statement.

The merger will make Grab the most valuable Southeast Asian company to list shares in the U.S.

Under the deal, Altimeter’s shares will be subject to a 3-year lock-up period in a show of its commitment to Grab.

“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,” Grab CEO Anthony Tan said in a statement.

Brad Gerstner, founder and CEO of Altimeter, described Grab as one of the world’s largest and fastest-growing companies.

“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,” Gerstner said in a statement.

SPAC mergers have gained popularity over the last year as they allow companies to go public and gain capital more cheaply and more quickly than using a conventional IPO process. When the SPAC acquires a target, the acquired company takes the SPAC’s spot on an exchange and typically gets a new stock ticker.

A traditional IPO requires a company to hire an investment bank, produce mountains of materials for investors to scrutinize, and eventually talk to potential investors in roadshows before they can go public.

Singapore-based Grab, founded by Tan and co-founder Tan Hooi Ling (no relation) in 2012, began as a ride-hailing company but later expanded into offering other services such as deliveries of groceries and take out meals, digital payments and financial services.

The company was last valued at more than $14 billion after a $1.5 billion cash injection from Japan’s SoftBank in 2019.

The SPAC company, Altimeter Growth Capital, is a so-called blank-check company sponsored by Altimeter Capital Management, a technology-focused investment firm based in California. According to an SEC filing, Altimeter Growth Capital was incorporated in Aug. 2020.