Uber has confirmed that it will acquire its Middle East rival Careem for $3.1bn, made up of $1.7bn in convertible notes and $1.4bn in cash, as reported it would yesterday. The deal is expected to close in the first quarter of 2020, should all necessary regulatory approvals be granted.

Uber will pick up all of Careem’s mobility, delivery, and payments businesses across the Middle East, North Africa, and South Asia, which includes markets in Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world,” said Dara Khosrowshahi, Uber CEO. “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 Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world.”

Though Careem will become a wholly-owned subsidiary of Uber, the Dubai-based company will continue to operate independently under the leadership of its co-founder and CEO Mudassir Sheikha. The Careem business will report to its own board made up of three Uber representatives and two Careem representatives.

“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires,” said Sheikha. “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. This is a milestone moment for us and the region, and will serve as a catalyst for the region’s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors.”

There is some overlap of services in the markets that Careem operates in, but it seems Uber will continue to offer its own service alongside Careem’s in places like Dubai and Cairo. However, there is still a long way to go until the deal is finalised and plans can change.

“I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately,” said Khosrowshahi in an email to all Uber employees. “After careful consideration, we decided 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. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region… Very little will change in either teams’ day-to-day operations post-close.”