Ride-sharing giant Uber and Careem have announced a deal where Uber will be acquiring Careem for $3.1 billion, which consists of $1.7 billion in convertible notes and $1.4 billion in cash. The acquisition of Careem is subject to applicable regulatory approvals and is expected to close in the first quarter of 2020.
As part of the deal, Uber is going to buy all of Careem’s mobility, delivery, and payments businesses across the greater Middle East region ranging from Morocco to Pakistan and it includes major markets like Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates.
Once the deal closes, Careem will become a wholly-owned subsidiary of Uber and the brand will be preserved. Careem co-founder and CEO Mudassir Sheikha will continue leading the subsidiary and is going to 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 in a statement.
This transaction supports the collective ability of Careem and Uber to improve upon the great Middle East region’s transportation infrastructure at scale while offering diverse mobility, delivery, and payment options. It will also contribute towards the economic and social benefits of rapid technology adoption and improved access to transportation in the greater Middle East region. Plus this deal will speed up the delivery of digital services to people in the Greater Middle East region through the development of a “super-app” that offers services like Careem Pay (digital payments) and Careem NOW (last-mile delivery).
“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organization 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 realize 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,” added Sheikha.