Grab to sell US$1.25 bln in convertible bonds to fund purchases as GoTo takeover stalls

Grab Holdings is planning a US$1.25 billion sale of bonds convertible into stock, partly to bulk up its war chest for acquisitions amid signs that talks to take over rival delivery-and-transport provider GoTo Group have stalled.

Singapore-based Grab, whose app is ubiquitous in Southeast Asia for ride hailing and food delivery, will issue convertible bonds that mature on June 15, 2030, it said in a statement on Monday. The securities will carry a coupon of as much as 0.5 per cent a year, payable semiannually, according to terms of the deal seen by Bloomberg News.

Grab joins the flurry of sales of bonds that can be swapped into stock by Asian companies this year. That is particularly been the case with Chinese firms as issuers from Baidu to Ping An Insurance Group of China announced sizeable deals in recent months.

Aside from possible acquisitions, Grab said it plans some share buy-backs – the company has US$274 million remaining under its share-repurchase programme as of the end of March. The bonds will be redeemable, under certain conditions, from mid-2028.

As for the GoTo acquisition, Grab on Monday signalled that it was halting or at least pausing a planned US$7 billion acquisition. The pair of ride-hailing and food-delivery companies have held on-and-off talks for years, but a combination never materialised, partly because of antitrust concerns likely to arise from combining the two dominant players in Southeast Asia.

Grab’s offering is the largest Asian convertible-bond deal denominated in US dollars since Ping An’s US$3.5 billion deal in July 2024, and the biggest by a non-Chinese company since Korean chipmaker SK Hynix’s US$1.7 billion issuance in 2023. Ping An last week also issued convertible bonds worth US$1.5 billion, denominated in Hong Kong dollars.