Altimeter Jumps On $40-Billion Deal To Buy Grab In Largest Blank Check Merger

imageStock Markets1 hour ago (Apr 13, 2021 07:25AM ET)

(C) Reuters.

By Dhirendra Tripathi – Shares of Altimeter Growth (NASDAQ:AGC) rose by more than 10% in Tuesday’s premarket after Grab said it would merge with the blank check firm in a $40 billion deal, the largest merger yet involving a special purpose acquisition company.

The Singapore-headquartered ride hailing firm will receive $4.5 billion through the so-called ‘PIPE’ mechanism (private investment in public equity).

A SPAC is a blank-check shell company that uses proceeds from an IPO to take private firms public. It is usually set up by high profile people with relevant industry experience and that’s what gets it the valuation since as such it doesn’t have running operations at the time of going public.

The listing of a SPAC is a quicker process and involves less scrutiny. Once listed, a SPAC’s promoters hunt for the right acquisition target to deploy the IPO proceeds.

Grab is a popular ride hailing taxi service in southeast Asia, and is backed by Softbank (OTC:SFTBY), Uber (NYSE:UBER) and Didi Chuxing.

The company is also into online food delivery and digital wallet payments. Grab expects its total addressable market to grow to more than $180 billion by 2025 from approximately $52 billion in 2020.

Altimeter Jumps On $40-Billion Deal To Buy Grab In Largest Blank Check Merger

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