E-taxi corporation Uber is said to have concluded plans to purchase Dubai’s rival Careem Networks FZ for $3.1 billion. The acquisition deal is yet to be made official by the American taxi app.
Uber will reportedly pay $1.4 in cash and $1.7 billion in short-term debt that will eventually turn into equity, with a possible financial round in the future. According to Bloomberg, the convertible notes will be turned into Uber shares based on an existing-term sheet.
Careem’s most prominent shareholders include Saudi Prince Alwaleed bin Talal’s investment firm and Rakuten Inc., a Japanese e-commerce site will agree or suggest amendments for the deal by the end of the day (Monday 25) to allow the deal to go official tomorrow.
The purchase, which may be one of Uber’s most expensive acquisitions, will precede the company’s IPO at the New York Stock Exchange. The IPO may also be NYSE’s largest listings of all time. Upon listing in the NYSE, a development that has severally been teased in the past, Uber’s value could be as much as $120 billion.
Careem is one of Middle East’s most popular and highly-valued startups, which reported a $1 billion valuation sometime in 2016. According to its latest numbers, it has since onboarded more than a million driver partners and serves more than 90 cities in 15 countries. Its acquisition by Uber will see the e-taxi pioneer cement its position in Careem’s market.
Uber, whose operations across the globe were subject to several hurdles including administration issues that saw the departure of its founder and CEO, has had a relatively quiet 2018. This development also implies a new strategy, because, in the past, it engaged in expensive deals to counter costlier foreign operations for stakes in competing products.