Ride-sharing giant Uber announced on Tuesday that it had acquired Dubai-based competitor Careem for a hefty $3.1 billion sum, per Gizmodo.
Careem, which operates throughout the Middle East, will continue to operate under the independent brand after the deal and will continue to be led by founder and CEO Mudassir Sheikha, according to an official Uber press release. Uber will also remain in the Middle East market alongside the Careem brand.
The purchase, which Uber has touted as the largest technology buyout in the Middle East, includes $1.4 billion in cash, with the other $1.7 billion in promised convertible notes. Uber also stated that the deal will now be subject to various regulatory approvals and that the company expects the final transaction to close in the first quarter of 2020 if it passes approvals as expected.
In a statement, Uber CEO Dara Khosrowshahi expressed his excitement after the deal.
“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.”
Careem CEO Sheikha also issued a statement on the deal, calling it a “milestone moment” for the region and expressing the hope that the acquisition can help bolster technological innovation and the economy as a whole throughout the Middle East.
“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…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.”
The scope of the deal firmly establishes Careem as a trailblazer among technology companies in the Middle East. The affiliation with a brand as well-known as Uber will undoubtedly bolster the region’s reputation in the international business community and fuel other startups.
The deal also arrives at an opportune time for Uber — with their IPO rumored to be as soon as April, per Reuters. News of the Careem acquisition certainly shores up the company’s dominance in the global market and could help demonstrate to potential investors that the company is willing to spend aggressively to keep expanding. With rival Lyft issuing their IPO earlier this month, Uber is hoping to make an impressive splash and assert their superiority over their smaller rivals.