Uber is set to acquire its middle-eastern rival Careem for $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. Uber announced on Tuesday that as part of the deal, it will acquire all of Careemâ€™s mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan, with major markets including Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates.
The acquisition of Careem is subject to applicable regulatory approvals and is expected to close in Q1 2020. Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand. Careem co-founder and CEO Mudassir Sheikha will lead the Careem business, which will report to its own board made up of three representatives from Uber and two representatives from Careem. Careem and Uber will operate their respective regional services and independent brands.
â€śThis is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, 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. Working closely with Careemâ€™s founders, Iâ€™m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world,â€ť Uber CEO Dara Khosrowshahi said in a statement.
According to Uber, this transaction brings together Uberâ€™s global leadership and technical expertise with Careemâ€™s regional technology infrastructure and proven ability to develop innovative local solutions. Both companies believe it will provide an opportunity to expand the variety and reliability of services offered, at a broader range of price points to serve more consumers.
Today, we start Chapter 2 of our story. Careem is joining forces with Uber to better serve the regionâ€” Careem (@careem) March 26, 2019
We will operate independently, so the app, services and brand you love will continue to be available as usual.
For more details, visit https://t.co/1eGk5u6d1w pic.twitter.com/xn53Q9iyLI
â€śJoining forces with Uber will help us accelerate Careemâ€™s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires. 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 Daraâ€™s leadership to realise this opportunity. This is a milestone moment for us and the region, and will serve as a catalyst for the regionâ€™s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors,â€ť said Careem CEO and co-founder, Mudassir Sheikha.
Through this deal, Careem and Uber look to improve the greater Middle East regionâ€™s transportation infrastructure at scale and offer diverse mobility, delivery and payment options. It will speed up the delivery of digital services to people in the region through the development of a consumer-facing super-app that offers services such as Careemâ€™s digital payment platform (Careem Pay) and last-mile delivery (Careem NOW).
Similarly, for drivers and captains, the companies believe an increase in trip growth and improved services could provide better work opportunities as well as higher and more predictable earnings through greater utilisation of driversâ€™ time on the road.