HONG KONG – Southeast Asia’s largest ride-hailing company, Grab Holdings, said Tuesday that it plans to merge with U.S.-based Altimeter Growth Capital in a deal that would value it at nearly $40 billion and allow it to trade on the Nasdaq Stock Market.
That would make it the largest SPAC merger ever, more than double current record-holder United Wholesale Mortgage’s $16 billion merger in January.
The deal is the latest milestone in the booming business of SPACs, as investors race to find the next hot, young company when stock prices of big, established companies are already at records. SPAC stands for “special purpose acquisition company,” but they are often better known as “blank-check companies.” With a SPAC, investors plug in cash and then wait for it to find a privately held company to merge with, allowing the target to go public more quickly than if it went through a more traditional initial public offering.
In its SPAC deal, Grab is expected to receive about $4.5 billion in cash proceeds and will be valued at about $39.6 billion, according to a statement. Big institutional investors, including BlackRock, T. Rowe Price and Fidelity, are also putting cash into the deal.
The merger will make Grab the most valuable Southeast Asian company to list shares in the U.S. The company is headquartered in Singapore and serves customers across eight countries from Myanmar to Indonesia.
“It gives us immense pride to represent Southeast Asia in the global public markets," 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,” said Gerstner, a tech-focused investor who also is on the board of directors of iHeartMedia.