Uber today acquired its Middle East rival Careem in a deal worth US$3.1 billion, the two companies have announced.
Dubai-based Careem has cars in 120 cities across 15 countries – mainly in the Middle East, North Africa, as well as Pakistan. The deal includes Careem’s food delivery and payments units.
Photo credit: Careem
In a public letter, Uber CEO Dara Khosrowshahi described the acquisition as a “leap” forward for the company.
“Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha,” wrote Khosrowshahi. “I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary.”
Uber has opted to keep Careem as a separate app so that it can “build new products and try new ideas across not one, but two, strong brands,” Khosrowshahi added.
Sheikha also announced the deal on Twitter:
No retreat
The US$3.1 billion buyout, made up of US$1.7 billion in convertible notes and US$1.4 billion in cash, now faces regulatory approvals. Uber expects it to be finalized in the first few months of 2020.
Uber’s Middle East gambit is in contrast to its retreats from China, Russia, and Southeast Asia, where it sold off its local units to homegrown adversaries.
It also marks the Middle East’s biggest-ever tech buyout, eclipsing the US$580 million Amazon paid for Souq in 2017.
Editing by Eileen C. Ang
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