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One of the world’s largest ride-hailing companies, Uber, is set to prepare an IPO sometime in the next few months, but before it does that, Bloomberg reports that Uber will purchase Careem, a ride-hailing service primarily used in Middle Eastern and African countries.
Uber will acquire Careem in a $3.1 billion cash-and-share deal that is expected to be announced as early as this week. The deal includes $1.4 billion in cash and $1.7 billion in convertible notes, with those notes being converted to Uber shares worth $55 each.
Careem is headquartered in Dubai and operates rides in the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, Lebanon, Pakistan, Kuwait, Egypt, Morocco, Jordan, Turkey, Palestine, Iraq and Sudan. Careem has more than a million drivers on its platform and is in more than 90 cities spread across the world.
The purchase of Careem would complement and somewhat overlap with Uber’s footprint — the San Francisco-based ride-hailing giant currently operates in 65 countries and 10 of the countries Careem is already in. Uber doesn’t have drivers in Kuwait, Palestine, Iraq and Sudan. Careem also has purchased companies that operate food delivery services similar to Uber Eats and is working on its own food delivery business.
It’s unclear if Careem drivers will be ported over to the Uber platform once the deal is completed, but if that is the case, it could open up many more drivers, cities and countries for riders who prefer using the Uber app. Part of Uber’s appeal to travelers is that you can open up the app in any city Uber’s available in and order a ride without having to download and learn a new app.
Uber has struggled to compete in some overseas markets, instead selling off its operations for stakes in competitors, as was the case with Grab in Southeast Asia and Didi Chuxing in China.
We reached out to Careem but have not received response from the company. An Uber spokesperson declined to comment on the news.
Featured image by Thomas Trutschel/Photothek via Getty Images.
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