1 min read.Updated: 25 Mar 2019, 12:55 AM ISTMatthew Martin,Nour Al Ali & Dinesh Nair, Bloomberg
Uber Technologies will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem Networks FZ
Careem has until Monday evening to agree to the Uber deal, after which an announcement will be made Tuesday
Dubai/London: Uber Technologies Inc. is set to announce a $3.1 billion cash-and-share deal to acquire its Dubai-based rival Careem Networks FZ as early as this week, according to people with knowledge of the matter.
The US ride-hailing giant will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem, the people said, asking not to identified because the talks are private. The notes will be convertible into Uber shares at a price equal to $55 per share, according to the term sheet seen by Bloomberg.
Shareholders in Careem, whose backers include Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc., have been asked to agree to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday, people with knowledge of the matter said.
Representatives for Uber didn’t immediately respond to requests for comment, while a spokesman for Careem wasn’t immediately able to comment.
Careem was valued at about $1 billion in a 2016 funding round, making it one of the most valuable technology startups in the Middle East. The company has over a million drivers and operates in more than 90 cities in 15 countries, according to its website.
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.
The acquisition would also be a departure in strategy for Uber, which has used such deals to offload costly overseas operations in exchange for stakes in competitors in the past.