For years, Singapore-based Grab Holdings, the provider of everyday services ranging from digital payments and food delivery to ride-hailing and even insurance, has been mulling an initial public offering (IPO). But due to strict listing regulations, Grab could not tick all the right regulatory boxes to list on several stock exchanges.
Now, Grab will be merging with Altimeter Growth Corp, which is a special purpose acquisition company (SPAC) or blank-cheque company, to list the company on Nasdaq. This deal, slated for completion by end of the year, is expected to be the largest SPAC listing, valuing the company at some US$40 billion ($53.5 billion). It has drawn institutional backing from the likes of BlackRock, T Rowe Price Group and also Singapore’s sovereign fund Temasek Holdings. SPACs are investment vehicles that are listed despite having no real business. The plan is to raise money from investors and use it to buy into another company, typically a private one.
SPACs are not new but emerging as a popular IPO alternative for firms with less regulatory scrutiny over the past year or so.