Southeast Asian ride-hailing and multi-service app Grab is in merger talks with a special purpose acquisition company (SPAC) led by Silicon Valley-based investment firm Altimeter Capital Management, The Wall Street Journal reported on Friday. A possible deal could be valued between USD 35 billion and USD 40 billion, which would be the largest SPAC merger on record.
Altimeter’s two listed SPACs are the Altimeter Growth Corporation (NASDAQ: AGC) and Altimeter Growth Corp 2 (NYSE: AGCB), which respectively raised USD 450 million and USD 400 million.
With the deal, Grab would further collect between USD 3 billion and USD 4 billion through a private investment in public equity (PIPE) prior to the listing. The amount could still change once Grab and Altimeter start speaking with mutual funds and potential investors, according to sources.
Reutersreported earlier that Grab has been eyeing an initial public offering (IPO) on a US exchange this year, raising at least USD 2 billion. The company, which is backed by SoftBank and Mitsubishi UFJ Financial is currently valued at more than USD 16 billion. In February, it secured a USD 2 billion term loan facility in a round led by JP Morgan.
Despite the impact of COVID-19, Grab’s business recovered strongly in the second half of last year and the company reported a jump of its net revenue of about 70%, driven by a strong food-delivery business. Its financial arm raised USD 300 million in a Series A round and in December, the joint venture with Singaporean telecom company Singtel was granted a digital full-banking license from the Monetary Authority of Singapore (MAS).
Reports about IPO plans became more substantial following failed merger discussions with its Indonesian counterpart Gojek. The latter is now in advanced talks with e-commerce platform Tokopedia that could lead to a USD 18 billion merger and a potential dual listing in the US and Indonesia, that could value the combined entity at USD 35 billion to USD 40 billion.