Uber closing in on acquisition of rival Careem for over $3bn

CareemUber is poised to announce a deal to buy Careem, its main Middle Eastern rival, for $3.1bn in both cash and shares. $1.4bn will be paid in cash and $1.7bn in convertible notes, which are convertible into Uber shares at $55 per share, according to Bloomberg.

Careem’s shareholders – including fellow ride-hailing firm Didi Chuxing, Saudi Prince Alwaleed bin Talal’s Kingdom Holding Company, Rakuten, and Daimler – are set to agree to the terms by the end of today (25 March) and the deal could be announced as early as Tuesday.

The potential acquisition of Careem comes just ahead of Uber’s highly-anticipated initial public offering, which is likely to be one of the New York Stock Exchange’s biggest-ever listings when launched next month.

The move differs from Uber’s strategy over the past few years, which has seen it offload its foreign businesses to competitors in exchange for shares. It sold its Russian arm to Yandex, its Chinese division to Didi Chuxing and, most recently, its Southeast Asia operations to Grab.

Dubai-based Careem launched a food delivery service in Dubai and Jeddah at the backend of 2018 in a bid to diversify its offering and challenge Uber in the Middle East, North Africa, and South Asia. Careem Now, an independent app operating independently of the ride-hailing business, will eventually expand into delivering other goods and services across the region.