SPAC: Record $40B Merger Deal Sealed By Singapore’s Grab

Grab logo

Pertaining true to rumors, Grab, a Singapore-based ride-hailing giant dominating Southeast Asia, has officially agreed to a deal to go public by merging with a special-purpose acquisition company (SPAC). 

This time, Grab isn’t like other mergers as the $39.6 billion pro forma equity value that it’s negotiated makes the merger the biggest one to date.

Deal Details:

  • Grab is merging with Altimeter Growth Corp. (Nasdaq: “AGC”) and will start trading on the Nasdaq exchange with the symbol “GRAB” after the merger. 
  • From its merger, Grab will receive roughly $4.5 billion in gross cash proceeds with most of it coming from a $4 billion PIPE round led by a $750 million commitment from Altimeter Capital, the very sponsor of the SPAC it’s merging with. 
  • Grab’s merger is not just the biggest ever SPAC deal but is also expected to mark the biggest US equity offering by a company in Southeast Asia. It sets Grab on the global stage outside Southeast Asia where it doesn’t command much respect as it does in the region.
  • Grab began in 2011 as a ride-hailing company competing with Uber but has morphed into a “super app” offering a suite of digital services including payments, food delivery, and third-party logistics services. The “super app” concept is one that’s caught on well in Asian markets but not in the western world as in America and Europe..
  • Grab’s SPAC merger deal by size is more than twice the size of the previous record holder, United Wholesale Mortgages, which went public at a valuation of $16 billion.
  • For the merger, its SPAC sponsor Altimeter Growth Corp. has agreed to have its shares “locked up” for three years.

Business details:

  • Grab is by far the dominant ride-hailing and “super app” player in Southeast Asia. In a ten-year span, it grew very rapidly on the backs of a whopping $12 billion in venture funding. 
  • Grab reports a Gross Merchandise Volume (GMV), that is the total value transacted on its platform, at $12.5 billion in 2020. Adjusted net revenue in the same year was $1.6 billion.
  • Grab is present in 400+ cities in 8 countries. It reported having 25 million Monthly Transacting Users as of 2020 ending.

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