'Southeast Asia's Uber' Discusses SPAC Merger Listing... "Valuation Hits Record High"

(Source: WSJ, Samsul Said / Bloomberg News)

[Asia Economy Reporter Yujin Cho] The ride-hailing platform Grab, known as the "Southeast Asian version of Uber," is considering a U.S. stock market listing through a merger with a Special Purpose Acquisition Company (SPAC), the Wall Street Journal (WSJ) reported on the 11th (local time), citing multiple sources.

According to the report, Grab, Southeast Asia's largest ride-hailing platform headquartered in Singapore, is in talks to merge with a SPAC launched by Altimeter. If the deal is completed, the merged company's valuation could reach up to $40 billion (approximately 45.32 trillion KRW), potentially making it the largest SPAC merger to date, WSJ said.

An anonymous source stated that additional funding of $3 to $4 billion could be raised through a private investment in public equity (PIPE) following the listing. WSJ noted, "Grab and Altimeter are preparing for investment meetings with mutual funds and other potential investors, so the exact amount of funding is still unclear."

However, the discussions are still ongoing, and there is a possibility of failure. WSJ reported, "Grab and Altimeter could announce the merger within weeks, but there is still a chance the deal might fall through."

Grab, which had initially planned a formal initial public offering (IPO) earlier this year, shifted its direction to a SPAC merger listing amid the recent SPAC boom. According to Dealogic, the scale of SPAC mergers in the U.S. stock market has reached $73 billion this year, accounting for about 70% of all IPOs.

A SPAC raises funds through a public offering and lists on the stock market, then merges with a private company within a set period (two years). For private companies, listing via a SPAC offers the advantage of shortening the listing process compared to a formal IPO. The SPAC listing craze has continued as more companies seek quick fundraising amid increased volatility caused by the COVID-19 pandemic last year.

Founded in 2012 as a ride-sharing business, Grab rapidly grew to become the number one player in Southeast Asia after acquiring Uber’s Southeast Asian operations in March 2018. It currently provides services in eight countries including Singapore, Malaysia, Indonesia, Thailand, and Vietnam, and has evolved into a comprehensive economic platform covering finance, payments, shopping, and insurance. In October 2017, Grab received a $1 billion investment, with Japan’s SoftBank as a major investor.