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Uber buys Careem for $3.1 billion

Uber is paying $3.1 billion for Careem in cash and convertible notes

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Uber Technologies is buying Careem in a $3.1 billion (Dh11.39bn) deal in cash and convertible notes split into $1.4bn in cash and $1.7bn in notes convertible to Uber stock. The acquisition will however allow Careem to remain independent.

As per the announcement Uber is buying all of Careem’s mobility, delivery, and payments businesses across all of its markets which includes Egypt, Jordan, Pakistan, Saudi Arabia and UAE.

According to a joint statement by Uber and Careem, the deal will close in the first quarter of next year and will be subjected to regulatory approvals.

As far as the end user is concerned,  Careem and Uber will operate independently, so the app, services and brand will be individually available for customers to use as per their liking.

Since 2016, Uber has retreated from China, Russia and eight Southeast Asian countries all the while playing up its global ambitions before it goes public. Careem’s acquisition by Uber in about 24 of the more than 400 cities where it operates, has come ahead of its impending IPO on the New York Stock Exchange. The acquisition is expected to value the company at $120bn now.

Careem and Uber joining forces marks the biggest tech deal in the Middle East after  Amazon bought e-commerce startup Souq in 2017.

Careem’s CEO, Mr Mudassir Sheikha referred to the the deal with Uber a “milestone moment” for the region’s technology sector.

“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,” he said.

 

the authorIfrah Salman

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