A $3.1 billion deal for Careem could cut Uber’s losses in the Middle East. Uber Chief Executive Dara Khosrowshahi in a statement called the deal with Careem “an important moment for Uber.” Uber has been eager to reach an agreement before the company begins its “roadshow,” when it will meet with public market investors prior to listing shares on the New York Stock Exchange. Its backers include German car maker Daimler AG, Chinese ride-hailing company Didi Chuxing, Japanese internet company Rakuten Inc and Saudi investor Kingdom Holding Company. But Uber has remained unprofitable, burning cash on subsidies for its riders and drivers in an effort to undercut its competition. Uber Technologies has agreed to buy Careem in a $3.1 billion (Dh11.39bn) deal that will allow the Dubai ride-hailing technology platform to remain independent. Uber buys Mideast rival Careem for $3.1 billion in its biggest acquisition to date Careem co-founder Abdullah Elyas at the Careem office in Riyadh, Saudi Arabia. The deal is particularly important for Uber, whose ability to be a competitive global ride-hailing player had come into question after it sold its operations in China, Russia and Southeast Asia to local rivals after sustaining heavy losses. Uber operates in more than 70 countries, but faces strong rivals in Latin America and India and tough regulations in Europe. However, Careem’s board will be overhauled, with three seats going to Uber representatives and two belonging to Careem. David Chao, co-founder and general partner at venture firm DCM and a Careem investor, said it was the “first unicorn exit” in the Middle East, referring to start-ups valued at $1 billion or more, and representative of things to come. Careem had raised less than $800 million from investors and as of October had a $2 billion valuation. Uber said its revenue last year was $11.3 billion, while its gross bookings from rides were $50 billion. Uber said late on Monday night it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem. To address these concerns, Careem’s security and legal teams will report directly to Uber, according to a person familiar with the deal. An Uber spokesman declined to say whom Uber would appoint to the board. Uber is buying Careem, the biggest ride-hailing app in the Middle East. After months of speculation, it has been confirmed that Uber plans to acquire its Middle Eastern rival Careem in a deal worth $3.1 billion. Uber is buying Middle East rival Careem for $3.1 billion, with a combination of cash and debt.
The $3.1 billion cash-and-stock purchase buys out all external Careem investors, the companies said, and Careem stock will be converted into Uber equity. Uber will kick off its IPO next month and is expected to receive a valuation of at least $100 billion. Careem co-founders Mudassir Sheikha, Magnus Olsson and Abdulla Elyas are staying on with Careem following the acquisition, the companies said. But the company lost a staggering $3.3 billion, excluding gains from the sale of its overseas business units in Russia and Southeast Asia. The company is based in Dubai and operates in 15 countries, including Egypt and Saudi Arabia.
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uber buys careem