Uber to buy Careem

Uber To Buy Careem for US$3.1 billion

US peer-to-peer ridesharing giant Uber is expected to make an offer this week to buy the Dubai-headquartered ride-hailing service, Careem, for US$3.1 billion.

According to Bloomberg, Uber is believed to be preparing to make an offer of $1.4bn in cash and the remaining in convertible notes for Careem. Those notes can then be converted into Uber shares at a price point of $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.

According to experts, 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.

Shareholders in Careem, including Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc., have reportedly been asked to agree to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday.

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In 2016, Careem was valued at $1bn, thereby making it the most valuable tech startup in the Middle East. Since its inception in 2012, Careem has rapidly expanded and has a presence in more than 90 cities, employing over a million drivers.

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