Uber Technologies Inc.has taken over Careem, a transportation network company, based in the Middle East, the Reuters reported on Tuesday. Reportedly, the new acquisition is the largest tech deal in the Middle East to date.
The American ride-hailing firm will invest $3.1 billion to take over Careem; where $1.4 billion will be paid in cash and $1.7 billion in the form of convertible notes. Both the companies said that the deal is expected to be over in the first quarter of 2020.
The acquisition comes at a time when Uber is expected to announce its IPO and reports suggest that the company could value $120 billion; making it one of the biggest tech IPOs in history.
The final terms of the deal took almost nine months to complete before ending a few days back. And finally after a series of overseas divestments, Uber managed to win the deal.
Uber stated that the money will be convertible into Uber shares at a price equal to $55 apiece.
Now, Careem is a wholly subsidiary of Uber after the acquisition; where, initially Careem’s app will be intact. The co-founder of Careem: Abdulla Elyas, Mudassir Sheikha, and Magnus Olsson will stay on with Careem.
The ride-hailing company stated that its Revenue was $11.3 billion in 2018, and its gross bookings from rides were $50 billion. But, in Russia and Southeast Asia, the company marked a loss of $3.3 billion in its business.