Uber is reportedly expected to finalise a deal worth $3.1 billion to acquire its Dubai-based rival Careem. Reports suggest that the American ride-hailing company will pay $1.4 billion in cash and $1.7 billion in convertible notes that will be priced equal to $55 per share.
Careemâ€™s investors which include some of the most influential personalities, as well as businesses, were given until March 25 to agree to the terms after which a deal could be announced as soon as Tuesday, people familiar with the matter said.
The acquisition was reported a few days ahead of Uberâ€™s imminent public offering which is predicted to be one of the New York Stock Exchangeâ€™s biggest-ever listings. In its 2016 round of investment, Careem was valued at $1 billion, making it one of the most valuable startups in the Middle East.
Operating with over a million drivers in more than 90 cities in 15 countries, Careem had even partnered with the Dubai RTA for e-Hail Taxi service in a bid to boost the taxi sector. The new joint venture will see 10,843 taxis exclusively run for a limited period. Following this, the company was finalized by five e-Hail taxi firms that operate globally following the submission of technical and financial proposals.
The acquisition holds significant value for Uber where Saudi Arabian sovereign wealth fund â€“ one of its biggest investors is based. The acquisition also reflects a departure in strategy for Uber which has used expensive deals to offload overseas operations in exchange of stakes in competitors in the past.