Uber buys rival Careem in $3.1b deal to dominate ride-hailing in ME

Global ride-hailing firm Uber Technologies Inc will spend $3.1 billion to acquire Middle East (ME) rival Careem, buying dominance in a competitive region ahead of a hotly anticipated initial public offering, according to Reuters.

Uber said late Monday night it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem.

The long-expected agreement ends more than nine months of start-and-stop negotiations between the two companies and hands Uber a much-needed victory after a series of overseas divestments.

The notes will be convertible into Uber shares at a price equal to $55 apiece, Uber said, marking about a nearly 13 per cent increase over Uber’s share price in its last financing round, led by SoftBank Group Corp more than a year ago.

The acquisition makes Careem a wholly owned subsidiary of Uber and will keep the Careem brand and app intact, at least initially.

Careem co-founders Mudassir Sheikha, Magnus Olsson and Abdulla Elyas are staying on with Careem following the acquisition, the companies said.