Uber Acquires Middle East Rival Careem for $3.1b Ahead of its IPO

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Uber has agreed to acquire Middle East competitor Careem for $3.1 billion,
consisting of $1.7 billion in convertible notes and $1.4 billion in cash, in the region’s largest technology transaction ever.

There have been various media reports about this deal but today the firm officially confirmed the acquisition which it says awaits applicable regulatory approvals in the various countries Careem operates. The transaction is expected to close in Q1 2020.

Uber will acquire all of 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 but it will preserve its brand and will be led by Careem co-founder and CEO Mudassir Sheikha. Careem 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.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world. 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,” said Uber CEO, Dara Khosrowshahi.

The greater Middle East region is already seeing the economic and social
benefits of rapid technology adoption and improved access to transportation.
This transaction supports the collective ability of Careem and Uber to improve
the region’s transportation infrastructure at scale and offer diverse mobility,
delivery and payment options. It will speed up the delivery of digital services
to people in the region through the development of a consumer-facing super-app
that offers services such as Careem’s digital payment platform (Careem Pay) and
last-mile delivery (Careem NOW).

This transaction brings together Uber’s global leadership and technical
expertise with Careem’s regional technology infrastructure and proven ability
to develop innovative local solutions.

“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.
The mobility and broader internet opportunity in the region is massive and
untapped, and has the potential to leapfrog our region into the digital future.
We could not have found a better partner than Uber under Dara’s leadership to
realise this opportunity. 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,” said Careem CEO and co-founder, Mudassir Sheikha.