The head of Uber Technologies Inc., Dara Khosrowshahi, has diclosed the biggest deal of his management with the purchase of the competitor in the Middle East Careem Network for USD 3.1 billion.
Uber will pay Careem US $ 1,400 million in cash and another US $ 1,700 million in convertible bonds when the agreement is closed, the two companies said in a statement. The companies will request authoritarian approval in the 15 countries where Careem operates.
Uber CEO Dara Khosrowshahi said in a statement, “This is an important moment for Uber as we continue to expand the strength of our platform around the world.”
The applications of both companies will continue to operate with separate brands Jefferies LLC acted as exclusive financial advisor to Careem in the transaction. Because the companies are the two largest private vehicle transport companies in the Middle East, the acquisition could be subject to inspection by regulatory authorities.
According to reports, Uber is preparing to register its initial public offering with regulators in April. The acquisition is not expected to delay Uber’s IPO process and will allow the private vehicle travel company to strengthen its global presence against its rival Lyft Inc.
The acquisition will be Uber’s highest value purchase to date and the first time the company acquires a regional competitor. The acquisition of Careem represents one of the largest technology agreements in the Middle East, according to data collected by Bloomberg.
Careem will become a subsidiary of Uber. Mudassir Sheikha will hold the position of executive head of Careem. It will have its own board of directors, with three representatives from Uber and two from Careem.
Careem executive director Mudassir Sheikha called the agreement a “milestone” for the company.
”This has put our region on the map and has shown that it is a great place to build some of the best technologies in the world,” he added in a statement sent to the company’s customers.
A point in favor of the agreement is that the operation will allow the two companies to raise prices, while reducing the pressure on the amount they pay to drivers.
Uber has traded numerous international business units, in various countries. Recently, an important purchase was the achievement of electric bicycle company Jump Bikes.