The acquisition is the precursor to Uber’s long-awaited IPO in April 2019
US ride-hailing giant Uber is set to announce the imminent US$ 3.1bn acquisition of its Dubai-based rival Careem in a cash and stock deal, according to sources familiar with the matter.
Bloomberg and regional media are reporting that Uber will be paying US$ 1.4bn in cash and US$ 1.7bn in convertibles. The notes will be convertible into Uber shares at a price equal to US$55 per share.
The acquisition comes ahead of Uber’s long-awaited IPO next month, expected to value it at $120 billion. The company has chosen the New York Stock Exchange to list its shares.
It is expected that with the acquisition of Careem, a dominant player in the Middle East, Uber will have a virtual monopoly in the MENA region, and will make it even more attractive for investors, analysts said.
Shareholders in Careem, including Saudi Prince Alwaleed Bin Talal’s investment firm and Japanese e-commerce company Rakuten have reportedly been asked to agree to the terms of the transaction.
Careem, which has a much bigger footprint than Uber in the region with its services available across 15 countries and more than 100 cities including many second-tier cities, has raised around US$ 800mn in investments to date.
Launched in Dubai in 2012 by Mudassir Sheikha and fellow McKinsey & Co alumni Magnus Olsson, the Dubai start-up is reportedly valued at over US$ 2bn in its last funding round when it raised $200 million, making it one of the most valuable technology startups in the Middle East. The company has over a million drivers.
