The Financial Times reports that Grab, Southeast Asia’s most valuable startup, will merge “as early as this week” with a special purpose acquisition company controlled by Silicon Vally’s Altimeter Capital Management in preparation for an initial public offering later this year on the New York Stock Exchange.

Singapore-based Grab, whose business lines include ride-hailing, grocery delivery, financial services, and digital health care, was founded in 2012. The venture has raised about $12 billion to date from heavyweight investors including Softbank Capital, Hillhouse Capital, Invesco, Mitusbishi UFJ Financial Group, Toyota Motor Corp., and Uber Technologies.

The deal with Altimeter, which was previously reported in the Wall Street Journal, would be the largest merger ever between a private business and a blank-check investment vehicle—and value Grab at a whopping $35 billion to $40 billion.

Grab’s IPO is expected to be the first of a slew of Southeast Asia ventures to go public this year. Gojek, Grab’s main rival, is now in advanced merger talks with e-commerce giant Tokopedia. The two ventures are the most valuable startups in Indonesia, and would have a combined value of more than $14 billion, according to CB Insights. Bloomberg reports that the companies plan a dual listing for the merged entity in Jakarta and the U.S. and also will seek a target valuation of $35 billion to $40 billion.

Driving these two tech tie-ups and their scramble to go public is the rapid rise of Southeast Asia’s third major Internet powerhouse, NYSE-listed Sea Ltd., which during the pandemic leveraged the popularity of its mobile gaming and online shopping platforms to muscle into other businesses like payments and food delivery. Sea’s shares soared almost 400% last year, boosting the Singapore-based company’s market capitalization to more than $120 billion. Sea’s surge—and prodding from SoftBank founder Masayoshi Son—compelled Grab and Gojek to briefly set aside their longstanding mutual enmity to explore the prospect of an alliance. But talks quickly collapsed. In the aftermath, Gojek turned to Tokopedia, which immediately proved a better fit.

Bloomberg reports that there is far less overlap in the two Indonesian ventures’ business models than between those of Grab and Gojek and therefore their alliance faces far fewer regulatory hurdles. Meanwhile Gojek and Tokopedia have many common investors, including Google, Temasek Holdings, and Sequoia Capital India, and the two companies’ founders are old friends.

In 2019, I spent several weeks in Southeast Asia interviewing founders of Grab and Gojek for this feature for Fortune profiling what, at the time, seemed to be the two companies slugging it out for domination of Southeast Asia’s 650 million consumers and $2.8 trillion market. At the conclusion of that article, I quoted David Katz of KKR, one of Gojek’s backers, who suggested that the conflict might end in a draw: “The conventional view used to be that this is a winner-take-all market,” he said, “but no one thinks that now.”

But maybe the battle is shaping up to be a three-way stand-off, or possibly even an upstart victory for Sea.

More Eastworld news below.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com. 

Eastworld news

Sweetening the deal

Hong Kong’s top officials are preparing a package of tax breaks and other financial incentives to lure Wall Street banks, hedge funds, and private equity firms to set up shop in the city. Hong Kong officials see the measure as a way for the city to retain its status as the financial hub of Asia amid Beijing’s crackdown on political dissent in the city. Hong Kong’s offer already appears attractive to some financial firms. Investment managers have set up over 100 new companies in Hong Kong in recent months, while firms like Goldman Sachs, Citigroup, and Bank of America are planning on increasing staffing levels in the city. New York Times

Homegrown advantage

Chinese consumers have burned Nike shoes and boycotted Adidas products due to their past statements acknowledging reports of forced labor in China’s Xinjiang cotton industry. Amid the backlash, the Chinese sportswear brand Anta announced in a social media post that it was pulling out of the Better Cotton Initiative, a global sustainability organization in the cotton industry, and said it would continue to buy cotton produced in Xinjiang. Anta’s doubling down on Beijing’s line on Xinjiang will likely give it a short-term boost in sales, but its decision is also part of a years-long strategy to sidle up closer to Beijing. Fortune

Sabit's story

Anar Sabit was far from a revolutionary growing up in Xinjiang province, where she happily learned Mandarin Chinese and recited government slogans before taking a tech job in Shanghai. But Sabit got caught up in China's repression of its minority Uyghur population anyway. She left China for Canada in 2014, but during a trip to Xinjiang in 2017, she was detained in a reeducation camp for two years. Through Sabit’s story, the New Yorker gives a detailed account of Xinjiang’s history and how China’s heavy-handed responses to various uprisings helped create systemic and dystopian levels of oppression. New Yorker

Cashing in

Over 100,000 people in China have downloaded a mobile app from China's central bank in recent months, as Beijing has started rolling out the world's first digital currency that's backed by the central back of a major economy. So far, the small trials of the currency in places like Shenzhen have consisted of government handouts that incentivize people to use it to shop at McDonald's and Starbucks. But Beijing has big plans for its Digital Yuan. The currency is being designed to be untethered from the global financial system, potentially giving China a new tool to subvert the dominance of the U.S.-dollar and engage internationally on its own financial terms. Wall Street Journal

Coronavirus by country

North Korea announced to the World Health Organization (WHO) this week that it remains completely free of COVID-19. North Korea says it's tested 23,121 people for the virus since last year, but none of the tests, so far, have turned up positive. North Korea has taken extreme measures to contain the virus and almost completely sealed off its borders to the outside world, but experts believe that North Korea’s COVID-free claim is quite dubious since the government previously said it had quarantined tens of thousands of people with suspected symptoms. Still, North Korea says that participation in the upcoming Tokyo Olympics presents too high of a risk to its perfect record on COVID-19; it announced on March 25 that it was withdrawing from the Games to protect its athletes. Time

Markets and movers

API Holdings – The Indian digital pharmacy became India’s e-pharmacy unicorn after it announced on Wednesday that it raised $350 million from the venture capital firms Prosus Ventures and TPG Growth. The VC firms valued API Holdings at close to $1.5 billion in the deal. Bloomberg

Tesla – The American electric vehicle giant said on Chinese social media platform Weibo that its cameras are not activated in the Chinese market. China’s military had banned Tesla vehicles from entering its complexes in March due to security concerns related to cameras in Tesla vehicles. Reuters

Samsung – The South Korean electronics giant is projecting a 44.2% jump in its first quarter operating profit, which would mark its largest first-quarter increase since 2018. Samsung, the world’s largest maker of memory chips, smartphones, and electronic displays, has benefited from a sharp rise in demand for its mobile and home appliances and a spike in prices for its semiconductor chips. Financial Times

Serum Institute – On Wednesday, the Indian pharmaceutical firm, and the world's largest vaccine manufacturer, asked the Indian government for $400 million to help boost its COVID-19 vaccine manufacturing capacity. The Serum Institute is producing the COVID-19 vaccine developed by British firm AstraZeneca, and hopes to ramp up manufacturing from 65 million doses per month now to over 100 million doses per month in May. Reuters

Tencent – On Wednesday, the Amsterdam-listed venture capital firm Prosus sold a 2% stake in Chinese tech giant Tencent for $14.7 billion in the world’s second-largest block trade on record. Tencent’s share price in Hong Kong dipped 2.5% after the sale but bounced back to its pre-sale price by Thursday. Bloomberg

Bilibili – Chinese video streaming giant Bilibili is in talks to buy a 24% stake in troubled Chinese gaming studio Yoozoo Games for $765 million. Yoozoo's founder and CEO Lin Qi had partnered with Netflix to produce a blockbuster new television series The Three Body Problem, but was poisoned to death late last year. Authorities suspect that one of Lin's colleagues was responsible for his death, but have not charged anyone in the case. Deal Street Asia

Final figure

8.4%

China’s economy is set to grow by 8.4%, the International Monetary Fund projected in a report released Tuesday. The figure is ahead of the IMF’s 6.4% growth projection for the U.S., but behind India’s 12.5% forecast. The IMF also said that China will drive global economic recovery from the pandemic, and will account for 20.4% of the world’s economic growth from 2021 to 2026, compared to the U.S.’s 14.8% share and India’s 8.4% contribution. Bloomberg