Ride-sharing company Uber has recently announced that it has decided to acquire Careem, its Middle-Eastern ride-hailing competitor, for an amount of $3.1 billion.
The announcement came just this week, what with Careem claiming more than 30 million registered users and sells car-hailing services in around 120 cities all across North America, South Asia, and the Middle East.
In an email addressed to company staff beforehand, Uber CEO Dara Khosrowshahi explained the decision to purchase Careem, writing, "Today we are taking the next step in this journey-well, it's more like a leap, and a big one: in a few minutes, we'll announce that we've agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I've gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products-from digital payments to food delivery-to serve consumers."
"After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each," he added.
Characterized as the biggest-ever technology industry transaction this side of the Greater Middle East, the announcement comes just as Uber is approaching a much-anticipated Initial Public Offering. Per reports from various media outlets, this IPO can easily value the company as much as $120 billion, and is actually said to be as one of the biggest tech IPOs ever in history.
At the moment, the new acquisition is still subject to regulatory approval, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. It's also expected to be closed around 2020's first quarter, according to both Careem and Uber.
After losing around $1.8 billion back in 2018, it only makes sense that Uber acquired Careem, what with the company playing a key role in the future of Middle East's urban mobility, easily becoming one of, if not the, most successful startups ever in the region.
Per a statement, Khosrowshahi said that the company us sure to "deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world."
Careem co-founder and CEO Mudassir Sheikha will stay as the company's CEO.
