Uber announces $3.1 billion deal to buy Middle East rival Careem

KEY POINTS

• Uber’s $3.1 billion agreement to buy Careem consists of $1.7 billion in convertible notes and $1.4 billion in cash.
• Dubai-based Careem claims more than 30 million registered users in 120 cities across North Africa, the Middle East and South Asia.
• Uber is approaching a much-anticipated initial public offering that reports have said could value the company at as much as $120 billion.

Uber has reached a deal to acquire ride-hailing competitor Careem for $3.1 billion, the companies announced Tuesday.

Dubai-based Careem, founded in 2012, claims more than 30 million registered users and sells car-hailing services in 120 cities across North Africa, the Middle East and South Asia, from Morocco to Pakistan.

The announcement comes as Uber approaches a much-anticipated initial public offering that reports have said could value the company at as much as $120 billion. It is expected to be one of the biggest tech IPOs in history.

The acquisition, which remains subject to regulatory approval, consists of $1.7 billion in convertible notes and $1.4 billion in cash. It is expected to close in the first quarter of 2020, the companies said.

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,” Khosrowshahi said in a statement.

He added that the combined company will “deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world.”

Careem co-founder and CEO Mudassir Sheikha will stay on to lead the Careem business, the companies said. Careem and Uber will continue to operate as independent brands.

Uber is unprofitable, booking a $1.8 billion loss in 2018. Ahead of its blockbuster IPO, the company is pitching itself as a one-stop shop for transportation and logistics, not just taxi-hailing. The firm’s last big acquisition deal saw it buy U.S. bike-sharing firm Jump.

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