Uber Technologies Inc. (UBER) is set to put down roots in the Middle East with its $3.1 billion acquisition of Middle East rival Careem after more than nine months of negotiation. Uber will pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that makes Careem a wholly-owned subsidiary of Uber with Careem stock to be converted into Uber equity.
Careem co-founders, Mudassir Sheikha, Magnus Olsson, and Abdulla Elyas to continue with Careem following the acquisition. The board to be represented by two Careem and three Uber representatives.
The deal which is expected to close in the first quarter of 2020 is subject to regulatory approval by antitrust officials in countries where Careem operates. Uber is expected to initiate its IPO next month and is expecting a valuation of at least $100 billion. The deal is expected to empower Uber to influence a growing region outside of the United States.
Uber Chief Executive Dara Khosrowshahi in a statement called the deal with Careem “an important moment for Uber.”