On December 11, 2021, a subsidiary of Grab entered a share purchase agreement (SPA) with the current shareholders of Jaya Grocer. It intends to acquire all of the ordinary shares of Jaya Grocer and 75% of the preference shares of Jaya Grocer.
This was according to a file by the United States Securities and Exchange Commission (SEC).
Glossary on shares
Ordinary shares (also called common shares) of stock represent proportional ownership of a company. Meanwhile, preferred shares are shares of a company’s stock with dividends that are paid out to shareholders before common stock dividends are issued.
An SPA falls under the umbrella of mergers and acquisitions (M&A) and typically arises where an investor wholly or partially acquires a company.
So to put it in layman terms, Grab is essentially buying over Jaya Grocer and will get 75% of its profits.
Subject to certain terms, Grab will have the option to buy 25% of the preference shares of Jaya Grocer after the closing of the transaction. For local regulatory purposes, Grab intends to partner with a local investor which will own 50% of the voting shares in Jaya Grocer.
Closing under the SPA is subject to customary conditions and is currently expected to occur in the first quarter of 2022. Following the closing, Jaya Grocer is expected to become a subsidiary of Grab and its financial results will be consolidated by Grab.
Grabbing more market share
For context, Grab was recently listed on Nasdaq in December 2021, having finally gone public at a valuation of around US$40 billion, raising US$4.5 billion in the process.
Meanwhile, Jaya Grocer had reportedly bought back all its shares from Asean Industrial Growth Fund (AIGF) in November 2021. This came after initial reports in May that claimed the grocery store had planned on going public.
Jaya Grocer is a leader in the premium grocery segment in Malaysia and operates 40 stores across West Malaysia, with the majority being located in the Klang Valley.
While not much more is known about this SPA yet, one can only predict that it will strengthen the operations of Grab’s position as the strongest super app in Malaysia.
We reached out to Grab to verify and learn more about the above information, and a representative from Grab told Vulcan Post:
“Grab and Jaya Grocer can confirm that both companies have entered into an agreement, where Grab will purchase a partial stake in Jaya Grocer. The deal is subject to customary closing conditions, and we are unable to share more details at this stage.”
- Read other articles we’ve written about Grab here.
Featured Image Credit: Grab / Jaya Grocer