Uber dominates ride-hailing in the Middle East by acquiring rival Careem in $3.1 billion deal

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Key Highlights

Uber acquires Careem for $3.1 billion.

The share price of Uber enhanced by 13% from the last one.

Uber is steeping to the much-anticipated initial public offering and is expected to get value to $120 Billion.

Uber Technologies Inc announced on Tuesday that it has acquired Middle East rival and ride-hailing competitor Careem for $3.1 billion. The company is going to pay $1.4 Billion in cash and $1.7 Billion in convertible notes in a deal to own complete ownership of Careem. The deal got finalized after more than nine months of negotiations between the two parties and Uber succeeds in attaining much-needed victory after a series of overseas divestments.

This deal will enhance the share price of Uber by 13% from the last one that was observed more than a year ago when SoftBank Group Corp led the funding round. Now new Uber share price is $55 per piece.

Uber said Careem co-founders Magnus Olsson, Mudassir Sheikha, and Abdulla Elyas are continuing with Careem after the acquisition and Careem brand and app will continue functioning at least for initially and Careem will work as a fully owned subsidiary of Uber.

Careem’s board will be overtaken, with three seats going to Uber representatives and two belonging to Careem. Careem’s CEO Sheikha and Olsson will have board seats. With this acquition, Careem stock will be converted into Uber equity.

Careem came into action in 2012 and is headquartered in Dubai. It claims to have more than 30 million registered users and provides car-hailing services in 120 cities across North Africa, South Asia, and the Middle East and from Morocco to Pakistan. This deal is sought to be biggest-ever technology industry transaction in the greater Middle East.

Uber is steeping to the much-anticipated initial public offering and is expected to get value to $120 Billion. This IPO is going to be the biggest tech IPO of history.

According to Khosrowshahi statement, Careem has “worked as a masterpiece in crafting the future of urban mobility across the Middle East and converting to one of the most successful startups in the region,” He also added the merger of Careem in aubergine will lead to delivering astonishing outcomes for drivers, riders and cities, in this fast-moving technology of the world.”

Uber is making itself a behemoth in one-stop shop for transportation as well as logistics. Company previous biggest acquiring was U.S. bike-sharing firm Jump.

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