Uber buys rival Careem in $3.1 billion deal to dominate Middle East
The US-based ride-hailing company is looking to dominate the Middle Eastern market by acquiring rival Careem in a $3.1 billion deal.
Uber will acquire its Middle Eastern rival Careem for $3.1 billion in a move that will see the US-based company control a significant share of the ride-sharing market in the region.
The deal will be financed via a $1.7 billion in convertible notes and $1.4 billion in cash, with the acquisition expected to close in the first quarter of 2020, subject to regulatory approvals.
‘This is an important moment for Uber as we continue to expand the strength of our platform around the world,’ Uber CEO Dara Khosrowshahi said. ‘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,’ he added.
Uber will dominate Middle East ride-sharing market
Uber will acquire Careem’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.
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.
‘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,’ Careem CEO and co-founder, Mudassir Sheikha.
‘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,’ he added.
Careem deal: a long time in the making
Talks between the two companies have dragging on since the middle of last year, with negotiations heating up nearer the end of 2018.
The two companies provided stiff competition for one another for many years, which led to both companies subsidising drivers and offering frequent discounts to customers, driving prices artificially low for both brands.
The deal will allow Uber to control a dominate position in the Middle East at a time when the company is still fighting tooth and nail for market share in other regions like Latin America, India and Europe.
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