It was reported last week that Uber could soon announce the acquisition of Careem, its main rival in the Middle East. The reports have turned out to be accurate as the company confirmed this morning that it’s acquiring Dubai-based Careem for $3.1 billion. The company was founded in 2012 and it has rapidly expanded in markets across the Middle East, North Africa, and South Asia. It developed services with the local customs in mind which led to Careem emerging as a bona fide Uber competitor in these markets.
The terms of the agreement indicate that Uber will be parting with $1.4 billion in cash to acquire Careem in addition to $1.7 in convertible notes. The transaction is subject to regulatory approvals and Uber expects the deal to close by the first quarter of next year.
With this acquisition, Uber is acquiring all of Careem’s mobility, delivery, and payments business across the Middle East region including other major markets like Pakistan, Egypt, and Jordan.
Once the deal is closed, Careem will continue to operate as a wholly-owned subsidiary of Uber under its own brand. It will not be merged with Uber proper. Careem co-founder and CEO Mudassir Sheikha will remain in the driving seat of the business.