SoftBank-backed Grab agrees to deal to go public in world's largest SPAC merger

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Southeast Asia’s ride-hailing giant Grab announced Tuesday it is set to go public through a SPAC merger with Altimeter Growth Corp., in a deal that values the company at $39.6 billion β€” the largest blank-check merger to date.

Grab says it intends to list on the Nasdaq under ticker symbol GRAB following the deal’s completion.

Special purpose acquisition companies are shell companies set up to raise capital to acquire private companies. A SPAC listing bypasses Wall Street’s traditional IPO process. Altimeter Growth’s stock rose more than 8% in premarket trading after the announcement, from its previous close of $13.95 a share.

As part of the deal, SoftBank-backed Grab will receive about $4.5 billion in cash, which includes $4 billion in a private investment in public equity arrangement, managed by BlackRock, Fidelity, T. Rowe Price, Morgan Stanley’s Counterpoint Global fund and Singapore’s sovereign wealth fund Temasek. PIPEs are mechanisms for companies to raise capital from a select group of investors that make the final market debut possible through their financing.

“I remember years ago when we were talking to investors, some folks didn’t even know where Southeast Asia was on a map,” Grab co-founder and CEO Anthony Tan said Tuesday on CNBC’s “Squawk Box.”

“So, today as we announce what is expected to be the largest U.S. equity offering in Southeast Asia … it shows validation of the tremendous offering right here in this region, and that the ‘super app’ strategy works.”

Grab, ranked No. 16 on last year’s CNBC Disruptor 50 list, delivers an array of digital services such as transportation, food delivery, hotel bookings, online banking, mobile payments and insurance services from its app β€” thus the “super app” title. It operates in most of Southeast Asia, serving more than 187 million users in over 350 cities across eight countries.

While SPACs have become a hot investment vehicle on Wall Street, they’re also gaining traction in Asia with six regional-focused SPAC companies that have collectively raised $2.7 billion thus far in 2021.

But in the first quarter this year, capital raised by blank-check firms like Altimeter has already outpaced 2020’s total issuance. It has not only drawn the attention