ISLAMABAD: US based ride hailing giant Uber is set to acquire its rival company in Middle-east Careem for US$ 3.1 billion.
As per detail, Uber will pay Careem US$ 1.4 billion in cash and another US$ 1.7 billion in convertible notes. The deal is set to complete in the first quarter of 2020.
This does not mean the Careem’s brand will be scrapped. According to the deal, both companies’ apps will continue to operate as separate brands. Careem’s CEO Mudassir Sheikha will continue to manage the same company. Furthermore, Careem will have its own board with three representatives from Uber and two from Careem.
Delving into the details of this new arrangement, Uber shared in a press release: ” After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.”
The statement emphasized that there will be “very little will change in either teams’ day-to-day operations” after the acquisition.
Meanwhile, Uber’s CEO Dara Khosrowshahi expressed hope that this new partnership would allow them to deliver “exceptional outcomes”.
“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. Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world,” said Dara.
On the other, Careem’s CEO Mudassir Sheikha said that they could not have found a “better partner than Uber.”
“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires. The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future. We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity. This is a milestone moment for us and the region, and will serve as a catalyst for the region’s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors,” Mr. Sheikha said.