Dubai – Mubasher: Ride-hailing company Uber Technologies has initiated preliminary talks with its Dubai-based rival Careem to merge their Middle Eastern ride-hailing services, sources familiar with the matter said.

Both companies, which seek to resolve a costly rivalry, have considered a slew of potential deal structures, but they have not reached an agreement yet, Bloomberg News reported on Tuesday.

In its discussion with the Middle Eastern rival, Uber announced it would need to own more than half of the combined company, if not buy Careem outright, the sources noted. This step came as the San Francisco ridesharing company prepares for a public offering next year.

It is worth noting that Saudi Arabia's main sovereign wealth fund, the Public Investment Fund (PIF), is a large investor in Uber after acquiring a $3.5 billion stake in the company in 2016. 

Careem, which is currently in talks with investors to raise $500 million, operates in more than 70 cities over 10 countries from North Africa to Pakistan. “The company is said to have held early talks with banks about a potential IPO in January,” Bloomberg said.