Taxi booking app Uber set up an acquisition of Middle Eastern rival Careem for $3.1 billion as it looks to boost its presence in the region and prepares for an IPO.
In a move reported to be the biggest tech deal the region has ever seen, Uber announced it will acquire all of Careem’s mobility, delivery, and payments businesses across the greater Middle East region including major markets Egypt; Jordan; Pakistan; Saudi Arabia; and the United Arab Emirates.
Uber explained in a statement the deal brings together its global leadership and technical expertise with Careem’s regional technology infrastructure, and ability to develop innovative local solutions.
Careem co-founder and CEO Mudassir Sheikha will continue to run the business, which will report to a board comprised of three representatives from Uber and two from Careem. The companies will operate their respective regional services and independent brands.
Uber chief Dara Khosrowshahi (pictured, right) explained in a blog post that “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.”
Meanwhile Sheikha stated: “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. We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity.”
The deal consists of $1.7 billion in convertible notes and $1.4 billion in cash. The acquisition is subject to applicable regulatory approvals and is expected to close in Q1 2020.
Financial Times stated: “For lossmaking Uber, taking over its strongest competitor in the region cements a dominant position in a fast-growing international market in the run-up to its IPO.”
Uber is expected to file for an IPO on the New York Stock Exchange next month, in a move that could value the company at more than $100 billion.Subscribe to our daily newsletter Back