Central Retail Corporation (CRC), the SET-listed retail arm of Central Group, is set to spend 4.5 billion baht to purchase the majority of shares of Porto Worldwide, which has a 40% stake in Grab's business in Thailand.
The goal is to bolster CRC's business through the strength of the superapp.
According to CRC's statement to the Stock Exchange of Thailand, CRC subsidiary Hillborough Group will purchase 133.5 million shares of Porto, or 67% of total shares, from OAL Holding, which exercised its put option to sell the shares.
In December 2019, CRC sold 67% of shares of Porto to OAL, which is also affiliated with CRC.
Porto holds a 40% share in Grab Taxi Holdings Thailand.
The planned purchase is expected to be completed this month, CRC said.
Yol Phokasub, chief operating officer of CRC, said in the statement the investment in Grab will be a boon for CRC's ecosystem and omnichannel platform as Grab is a leading online-to-offline platform service provider with fast growth and expansion of across Asean.
"In Thailand, Grab has a variety of services from food delivery to transportation, logistics, hotel and accommodation reservations and financial services, which would support and drive the organisation to become a digital retail organisation and help in furthering the company's business," said Mr Yol.
With the move, he said CRC may receive additional benefits if Porto exercises its right to swap its shares in Grab Taxi Holdings Thailand with ordinary shares of Grab Holdings (GHL), which listed on the Nasdaq yesterday.
Suthikorn Kingkaew, project leader of Thammasat University's Research and Consultancy Institute, said GHL's listing on the Nasdaq will "positively impact" Central Group's financial position.
Both Central Pattana (CPN) Plc and CRC hold 33% and 67% of Porto, which owns around 40% of Grab Thailand. Porto can also exercise the right to exchange shares of Grab Taxi Holdings Thailand with Nasdaq-listed GHL.
"This would raise the value of Central Group holding in Porto to 14 billion baht and this figure can go up further as GHL price is anticipated to increase after its Nasdaq debut," he said.
The improving valuation reflects the growing trend that big corporations from Thailand are investing further in startups and anticipate significant capital gain when those startups become successful and go public, he added.
According to Grab, Central Group is one of Grab Thailand's shareholders, having held 40% since 2019.
Chantsuda Thananitayaudom, country marketing head of Grab Thailand, said Grab and Central Group have been cooperating through business synergy since 2019, including Central Restaurants Group Co on GrabFood.
"Many things have been going well between us," she said, adding Tops Supermarket and FamilyMart under CRC are on the Grab platform.
Pawoot Pongvitayapanu, an e-commerce pundit, said the investment would be a boon for Central Group's business for its online-to-offline approach.
Grab still dominates ride-hailing and food businesses in Thailand while True and Shopee are pushing hard with aggressive tactics to attract customers, he said.
For AirAsia and Siam Commercial Bank, which are also jumping on the superapp bandwagon, it may take time for them to be able to compete, he added.
Aitsanart Wuthithanakul, a marketing guru, said this business deal will help CRC expand to a new business format.
"Grab will help CRC expand to new businesses and grow overseas without starting from scratch and it will be a growth engine for CRC to build its new S-curve. With the strong database of Grab, CRC sees huge opportunities to create new business,'' Mr Aitsanart said.