Uber Wants To Acquire Dubai-Based Rival Careem

Uber Wants To Acquire Dubai-Based Rival Careem

There are rumors that Uber wants to offer over $3 billion to buy out its Middle Eastern rival, Careem.

San-Francisco-based Uber is focusing on growth as it invests more and more in food delivery, electric bikes, logistics, and self-driving cars and it has been seeking new avenues of growth even as it faces severe competition from rivals like Lyft Inc. That is why it is now in advanced discussions to buy Careem Networks FZ, its Dubai-based rival, and if it is successful, Uber may become a ride sharing powerhouse in the Middle East.

Careem was valued at about $1 billion in a 2016 funding round, having more than a million drivers and operates in more than 100 cities in the Middle East, being backed by Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce giant Rakuten Inc.

The offer estimated at over $3 billion is planned to be unveiled in the first part of this week, and is said that Uber will pay $1.4 billion in cash and $1.7 billion in convertible notes, which will later be convertible into Uber shares at a price equal to $55 per share. However, it seems that negotiations are ongoing and no final agreement was made, representatives for both the companies have not made any official statements.

Uber is believed to be publicly filing for its IPO in April, and acquiring Careem would give investors another reason to back the company. Plus, Uber would increase its chances of receiving more funding if it’s useful to ride hailing in the region and it will also form an alliance with Rakuten, one of the main backers of its main competitor, Lyft Inc.