Ride-hailing firm Grab agrees to $40bn merger with 'blank cheque' company

South-East Asia's most important ride-hailing and meals delivery firm, Pick up Holdings, agreed to a merger in Tuesday with US-based Altimeter Expansion Corporation in a deal that gives Grab an initial equity value around $39.6 billion and can cause a public listing.

The merger, the largest "blank cheque" company deal ever, underscores the frenzy on Wall structure Street as shell companies have raised $99 billion in the United States so far this season after an archive $83 billion in 2020.

Singapore-established Grab's agreement with a particular purpose acquisition company supported by Altimeter Capital carries a more than $4bn personal investment in public areas equity by investors including BlackRock, Fidelity Worldwide, Janus Henderson Investors and Temasek Holdings.

The offering is led by $750 million from funds managed by Altimeter Capital. The transactions provides Grab with about $4.5bn in dollars proceeds.

Grab said its decision to become public company was first driven by a solid financial performance in 2020, despite the pandemic.

The deals for Grab, that was valued at only over $16bn last year, will be a major win for its early backers such as for example SoftBank Group and China's Didi Chuxing. The bumper valuation validates Grab's co-founder Anthony Tan's strategy to aggressively tap growth in different sectors and crank up market share by pumping billions of dollars to localise its solutions and invest in high-growth economies.

The proposed transactions, which were approved by the boards of both Pick up and Altimeter Development, are anticipated to close over another few months, subject to shareholder approvals

Grab attracted global attention in 2018 when it again acquired Uber's South-East Asia business after an expensive five-year struggle and in exchange took a stake in the company.

Reuters reported in January that Grab, which has up to now raised about $12bn, was exploring a good US listing.

Grab's agreed transaction will surpass electric auto maker Lucid Motors' $24bn package struck with a good Spac in February.

With procedures in eight countries and 398 cities, Grab is already South-East Asia's most effective start-up.

Leveraging its ride-hailing organization that began in 2012, the company has moved into meals and grocery deliveries, courier services, digital obligations and is currently making a push in insurance and lending in a region of 650 million guys.

The listing gives Grab extra firepower in its key market, Indonesia, where native rival Gojek is near sealing a merger with the country's leading e-commerce business, Tokopedia.

Grab, whose net earnings surged 70 % last year, has yet to carefully turn profitable, nonetheless it expects its most important segment - the meals delivery organization - to break even by the finish of 2021, as even more consumers shift to over the internet food delivery following the Covid-19 pandemic.

Cash-rich, US-listed Sea can be muscling into food delivery and personal services in Indonesia. Both Pick up and Sea won digital lender licences in Singapore this past year.