Uber, the world’s largest privately-held company, announced on Tuesday the acquisition of its first rival in the Middle East, Careem, in a deal worth $3.1 billion.
Careem, a UAE based startup in Dubai has been established back in 2012 and has since become the leader in shared transport with a user base of 30 million users in 90 cities across the Middle East, North Africa and Pakistan.
Uber starts to send a letter to its subscribers confirming that it had reached an agreement to acquire Careem, explaining that the two companies will continue to operate through both applications and trademarks, as is now the case, including operations.
Uber said in a statement that the company would acquire Careem at a total price of $ 3.1 billion, paying $ 1.7 billion through convertible bonds and paying $ 1.4 billion in cash.
Careem added that Careem will be wholly owned by Uber, and will operate as an independent company under its brand name and under the leadership of one of its founders and CEO, Mudassir Sheikha.
Uber’s market value is estimated at $ 120 billion and Uber’s total revenue last year was $ 14.2 billion, while revenue before paying drivers’ share was $ 50 billion, up 45 percent from 2017.
Careem will have its own board of directors comprising 3 members from Uber and two representatives of Careem. The two companies will continue to operate through their respective applications and trademarks. The transaction is expected to be completed in the first quarter of 2020.
According to the company statement, the two companies will rely on cooperation to serve the region better and maintain a local experience, while nothing will change for the user. The two companies will continue to work with both their applications and brands just as they are now.