Uber 'to buy' Careem for at least $3bn

Acquisition is expected to be announced next week

In this Sunday, June 24, 2018 photo, Ammal Farahat, who has signed up to be a driver for Careem, a regional ride-hailing service that is a competitor to Uber, drives her car in Riyadh, Saudi Arabia. After lifting a longstanding ban on women driving, it's the latest job opening for Saudi women, that had been reserved for men only, and one that sharply challenges traditional norms. (AP Photo/Nariman El-Mofty)

Uber is said to be close to finalising a deal to buy Dubai-based rival Careem for at least $3 billion.

"The deal is still being finalised and will most likely be announced by Tuesday next week as the agreement needs to be shared with all the shareholders," a person familiar with the deal told The National.

The person said the deal will be worth just above $3bn but under $3.1bn once finalised.

Careem declined to comment when reached by The National.

Careem as a brand will remain for a period of time but will eventually disappear as the operation will become entirely Uber, according to the source.

On Sunday, Bloomberg reported that the US ride-hailing giant will pay $1.4bn in cash and $1.7bn in convertible notes at a price of $55 per share for Careem.

San Francisco-based Uber is focused on growth as it moves towards an initial public offering, with recent investments in food delivery, logistics, electric bikes and self-driving cars.

Last September, The National reported Uber and Careem were in talks to combine their Middle Eastern ride-hailing services, with Uber leaning towards an acquisition rather than a merger of the company in order to widen its presence in the Middle East.

Careem, whose backers include Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce giant Rakuten, reached a $1bn valuation in 2016. Set up in July 2012 in Dubai, the company now operates in more than 120 cities in 15 countries in the Middle East, Turkey and Pakistan serving 33 million customers.