Uber said it would pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem.
Uber said it would pay $1.4 billion in cash and $1.7 billion in convertible notes as part of the agreement, which will be finalised in the first quarter of 2020.Uber will spend $3.1 billion to acquire Middle East rival Careem, buying dominance in a competitive region ahead of a hotly anticipated initial public offering., Uber said it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem.
The acquisition makes Careem a wholly owned subsidiary of Uber and it will keep the Careem brand and app intact, at least initially. Careem co-founders Mudassir Sheikha, Magnus Olsson, and Abdulla Elyas are staying on with Careem following the acquisition, the companies said. The deal is expected to close in the first quarter of 2020, the companies said, meaning it will not be reflected in Uber's first couple of quarterly earnings releases as a public company, although it will likely be disclosed in a public IPO filing. Uber will kick of its IPO next month and is expected to receive a valuation of at least $100 billion.
Talks between the companies had dragged on since at least last summer, sources told Reuters, although they did not get serious until the end of the year. The companies had for years battled in a competition for drivers and riders that had required discounts and subsidies and pushed prices artificially low.
"An Uber-Careem merger underscores the huge potential of car-hailing in the Middle East," said Sam Blatteis, CEO at the MENA Catalysts, a Middle East public policy advisory and research firm.
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