Ride-hailing giant Uber on Tuesday said it is acquiring the Dubai-based rival Careem for $3.1 billion, which will comprise $1.7 billion in convertible notes and $1.4 billion in cash.
The acquisition, expected to complete in the first quarter of 2020, will allow Uber to run Careem’s mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan.
Uber said it would allow Careem to maintain an independent brand and operate separately even after the transaction closes.
Uber CEO Dara Khosrowshahi said in a statement, “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.”
Careem will become a wholly-owned subsidiary of Uber, preserving its brand, Uber said. The two companies will continue to operate their respective regional services and independent brands.
Careem co-founder and CEO Mudassir Sheikha will lead the Careem business and will report to its own board, made up of three representatives from Uber and two from Careem.
“This is an important moment for Uber as we continue to expand the strength of our platform around the world,” Khosrowshahi said.
Uber is expected to go for initial public offering (IPO) in April.