SINGAPORE (Reuters) – Grab Holdings, the largest ride and food delivery firm in Southeast Asia, will announce a merger with US-based Altimeter on Tuesday that will value Grab at nearly $ 40 billion and create a public listing, four people told Reuters.
The merger, which will be the largest blank check deal ever, underscores the Wall Street madness as empty firms have raised $ 99 billion in the United States so far this year after record-breaking $ 83 billion in fundraising in 2020 .
Singapore-based Grab’s agreement with a special purpose acquisition firm (SPAC) backed by Altimeter Capital includes a $ 4 billion private investment in public equity (PIPE) from a group of Asian and global investors including Fidelity International and Janus Henderson, the sources said. .
Grab declined to comment on the SPAC deal.
There was no response from Silicon Valley’s Altimeter, Fidelity and Janus Henderson to email requests for comment.
The sources did not want to be identified due to the sensitivity of the case.
The deal for Grab, valued at just over $ 16 billion last year, will be a big win for its early backers such as SoftBank Group Corp and China’s Didi Chuxing.
Last year, Mitsubishi UFJ Financial Group Inc and IT services company TIS Inc invested $ 856 million in Grab as it expanded into financial services.
The high valuation confirms Grab co-founder Anthony Tan’s strategy to aggressively tap growth in new sectors and increase market share by pumping billions of dollars to localize its services and invest in high-growth economies.
“Institutional investors looking for Internet exposure from Asian consumers are eager to diversify their allocation beyond a handful of companies,” said Varun Mittal, head of emerging markets fintech operations at consulting firm EY.
Grab drew global attention in 2018 when it acquired Uber’s Southeast Asian operations after a costly five-year struggle and took a stake in the company in return.
Reuters reported in January that Grab, which has raised about $ 12 billion to date, was investigating a US listing. [L1N2JT0HC]
Grab’s agreed-upon transaction will surpass electric vehicle manufacturer Lucid Motors’ $ 24 billion deal with a SPAC in February. [L4N2KS4YJ]
BATTLE GROUND OF INDONESIA
With operations in eight countries and 398 cities, Grab is already Southeast Asia’s most valuable start-up.
Utilizing the ride delivery business started in 2012, the company has transitioned to food and grocery delivery, courier services and digital payments, and is now making a push toward insurance and loans in a region of 650 million people.
The listing gives Grab additional firepower in its main market, Indonesia, where local rival Gojek is on the verge of a merger with the country’s leading e-commerce company Tokopedia.
Grab, whose net sales grew 70% last year, has yet to become profitable, but expects its largest segment – food delivery – to break even by the end of 2021 as more consumers switch to online food delivery after the COVID-19 . pandemic.
Cash-rich US-listed Sea is also committed to food delivery and financial services in Indonesia. Both Grab and Sea won digital banking licenses in Singapore last year.
Reporting by Anshuman Daga; Adaptation by Muralikumar Anantharaman and Mike Harrison