Dubai – Mubasher: Uber Technologies Inc inked a deal to acquire the Dubai-based company Careem, its Middle East ride-sharing competitor, for $3.1 billion, Bloomberg News reported on Tuesday.
Uber will pay Careem $1.4 billion in cash and another $1.7 billion in convertible notes when the deal closes, the two ride-hailing companies said in a statement.
In what was pronounced as the largest ever technology industry transaction in the greater Middle East, both companies are seeking regulatory approval in the 15 countries where Dubai-headquartered Careem operates.
The deal is expected to be concluded in the first quarter of 2020.
“This is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region,” Dara Khosrowshahi, CEO of Uber, commented.
The bid comes along with San Francisco-based Uber’s preparations to file for an initial public offering (IPO) next month.
On the other hand, the acquisition will allow the US rail-hailing firm to step up its global footprint relative to rival Lyft Inc., which is forecast to start trading on Friday, according to the New York-based news agency.
“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires. The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future,” Mudassir Sheikha, co-founder and chief executive of Careem, said.
Under the new deal, Careem will continue to operate as a standalone brand even after the deal closes.
Moreover, Careem will become a wholly-owned subsidiary of Uber ad will continue to operate under its own brand, with Sheikha leading the Careem business.
Careem, whose investors included German carmaker Daimler and China’s largest ride-hailing company DiDi Chuxing, will also report to its own board made up of three representatives from Uber and two representatives from Careem.
