United States: Uber Is Set To Announce The Acquisition Of Careem In $3.1 Billion

न्यूज़ वर्ल्ड इंडिया | 0
| March 25 , 2019 , 09:54 IST

Uber Technologies Inc. is set to announce a $3.1 billion cash-and-share deal to acquire its Dubai-based rival Careem as early as this week.

According to the media sources, Uber will be paying $1.4 billion in cash and $1.7 billion in convertibles, according to a Bloomberg report. The notes will be convertible into Uber shares at a price equal to $55 per share.

The acquisition comes ahead of Uber's long-awaited IPO next month, expected to value it at $120 billion. The company has chosen the New York Stock Exchange to list its shares.

However, Uber spokesman Matt Kallman declined to comment while a spokesman for Careem wasn’t immediately able to comment.

Whereas Uber is expected to publicly file for an IPO in April, kicking off a listing that could value the company at as much as $120 billion, people familiar with the plans have said previously.

With the acquisition of Careem, a dominant player in the Middle East, Uber will have a virtual monopoly in the Mena region, and will make it even more attractive for investors, analysts said.

Shareholders in Careem, including Saudi Prince Alwaleed bin Talal's investment firm and Japanese e-commerce company Rakuten Inc., have reportedly been asked to agree to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday.

Careem, which has a much bigger footprint than Uber in the region with its services available across 15 countries and more than 100 cities including many second-tier cities, has raised close to $800 million in investments until now.

Launched in Dubai in 2012 by Mudassir Sheikha and fellow McKinsey & Co alumni Magnus Olsson, the Dubai start-up is reportedly valued at over $2 billion in its last funding round when it raised $200 million, making it one of the most valuable technology startups in the Middle East.

The company has over a million drivers.

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For Uber, a deal would signal its commitment to the Middle East, where one of its biggest investors a Saudi Arabian sovereign wealth fund is based.

Uber CEO Dara Khosrowshahi said at a conference in May that he believed the company would come out on top in India, the Middle East, and Africa.

According to an analyst, while Careem's current Total Addressable Market (TAM) opportunity in Mena, Turkey, and Pakistan is huge, it seeks to become the biggest mover of people in the Middle East, North Africa, Turkey and Pakistan region comprising 20 countries, 700 million people, 380 million people in cities and a current $10-12 billion ride-hailing market potential.

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