According to Bloomberg, Uber will pay $1.4 billion in cash and the remaining in notes convertible to Uber shares. With increased competition from rivals like Lyft and Careem, Uber has been searching for new opportunities that would lead to growth.
Confirming the rumors, on Tuesday, Mudassir Sheikha, Co-Founder and CEO Careem, tweeted:
Congratulations to every @Careem Captain, Customer and Colleague on this special moment. We’ve been blessed to impact the lives of millions in the region and it’s only the start as we join forces with @Uber.
Careem, who has termed this acquisition as ‘Careem – Chapter 2’, announced on its app and website that it will be remaining independent but rolling out more features and services for its customers.
But what does Uber buying Careem actually mean for the former rivals?
For Uber: this deal will ensure its dominancy in the Middle East as well as boosting the Middle East’s startup ecosystem. This acquisition follows Amazon.com’s acquisition with Middle East based online retail platform Souq.com back in 2017.
For Careem: the company that claims more than 30 million users in 120 cities, this deal is the biggest ever tech industry transaction in Middle East.
According to CEO Uber, Dara Khosrowshahi, combined the companies will be able to “deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world.”
The deal puts an end to the costly market share battle between the formal rivals and positions Uber as the ride hailing giant in the Middle East.