Careem to retain its brand identity in $3.1B Uber deal

Uber and Careem announced that they reached an agreement on the deal consisting of $1.7 billion in convertible notes and $1.4 billion in cash.

Global ride-hailing service provider Uber will acquire its regional rival Careem for $3.1 billion in the largest-ever technology transaction in the Middle East.
On Tuesday, Uber and Careem announced that they reached an agreement on the deal consisting of $1.7 billion in convertible notes and $1.4 billion in cash in a bid to expand operations in the greater Middle East region.
Under the deal, the Dubai-based Careem, among Middle East's most successful startups, will keep its brand as a wholly-owned subsidiary of Uber, operating as an independent company led by its original founders.
"Careem and Uber are joining forces. We have reached an agreement in which Uber will acquire Careem for $3.1 billion," a joint statement said.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, tweeted: "In 1999, many people questioned our idea to establish Dubai Internet City in the desert. Two years ago, Amazon acquired the multi-billion dirham Souq.com and today, Uber acquired Careem for Dh11 billion. These giant companies flourished from the 'desert' of Dubai."
Uber's CEO Dara Khosrowshahi said the deal expands the US-based company's strength around the world.
"This is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region," Khosrowshahi said. "This is an important moment for Uber as we continue to expand the strength of our platform around the world," he said.
Mudassir Sheikha, Careem chief executive and co-founder, said joining forces with Uber would help it accelerate its mission of simplifying and improving the lives of people, and building an awesome organisation that inspires.
The acquisition is subject to regulatory approvals and the transaction is expected to close in the first quarter of 2020.
Under the deal, Uber will acquire all of Careem's mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan, with major markets including Egypt, Jordan, Pakistan, Saudi Arabia, and the UAE, the joint statement said.
Sheikha will lead Careem's business under Uber and report to a board made up of three representatives from Uber and two from Careem.
Saudi-based Kingdom Holding, one of Careem's early investors, said the acquisition is an opportunity for both companies to expand and benefit from the region's rapid growth.
"This transaction supports the collective ability of Careem and Uber to improve the region's transportation infrastructure at scale and offer diverse mobility, delivery and payment options. It will speed up the delivery of digital services to people in the region through the development of a consumer-facing super-app," the statement said.
"We would like to congratulate Uber and Careem on this acquisition announcement. Over the years, we have witnessed various companies operating from DIC announce mergers and attract funding and this deal is the largest by far. Dubai Internet City is delighted to see Uber and Careem join forces, and we wish them a successful future," Ammar Al Malik, managing director of Dubai Internet City and Dubai Outsource City, told Khaleej Times.
Abdulrahman Tarabzouni, CEO and managing director of STV, another investor, said Careem is a true pioneer in the Mena technology industry and this transaction is testament to its rapid growth and the massive digital demand in this region.
"Our belief in Careem's deep local knowledge and expertise is why we participated in the $200 million Series F investment round in 2018. We are proud and excited to see Careem hit yet another major milestone, resulting in the largest ever technology transaction in the region," said Tarabzouni.
"This deal is a local success story and representative of exactly the type of technology champions we look to back and scale. We invested in Careem because of our common belief that technology is the key to simplifying and improving the lives of many," said Tarabzouni.
- issacjohn@khaleejtimes.com

Issac John

issacjohn@khaleejtimes.com