Global ride-hailing service Uber will acquire its Middle East rival Careem for $3.1 billion, the two companies announced on Tuesday.
“Careem and Uber are joining forces. We have reached an agreement in which Uber will acquire Careem for $3.1 billion,” a joint statement said.
Under the deal, Careem will become a wholly owned subsidiary of Uber but will continue operating independently. Careem will retain its branding, services and separate app. Uber will pay $1.4 billion in cash and the remaining $1.7 billion in convertible notes, the statement said.
Uber is going to let Careem operate independently, under the leadership of its co-founder and current CEO Mudassir Sheikha. This has been shared by Uber CEO Dara Khosrowshahi in an email written to the staff on March 25.
“This framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each,” says the email.
Uber CEO hopes that two companies are able to operate “more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region”.
The acquisition was announced on Tuesday.
Today, we start Chapter 2 of our story. Careem is joining forces with Uber to better serve the region
We will operate independently, so the app, services and brand you love will continue to be available as usual.
— Careem (@careem) March 26, 2019
Bloomberg reported that Uber is going to announce a $3.1 billion cash-and-share deal to acquire its Dubai-based rival Careem.
Uber’s acquisition of Careem would come ahead of its initial public offering, which could be one of the New York Stock Exchange’s biggest-ever listings. Uber is expected to publicly file for an IPO in April, kicking off a listing that could value the company at as much as $120 billion, people familiar with the plans have said previously.
Careem was valued at about $1 billion in a 2016 funding round, making it one of the most valuable technology startups in the Middle East. The company has over a million drivers and operates in more than 90 cities in 15 countries.