On-demand ride hailing provider Uber is in advanced discussions to acquire Careem, its United Arab Emirates-based counterpart backed by several corporates, for $3bn in cash and shares, Bloomberg reported yesterday.
Negotiations are ongoing but an announcement is expected within weeks, people familiar with the matter told Bloomberg.
Uber first approached Careem about merging its Middle Eastern business with the company in July 2018, before a price tag of $2bn to $2.5bn emerged in September.
Careem operates an on-demand ride service across 120 cities in 14 countries throughout the Middle East, North Africa, western and south Asia.
The Middle East and Africa are a priority for Uber, chief executive Dara Khosrowshahi said in May last year, and the company was expecting to become the dominant provider there. Merging its local business with Careem would end a costly rivalry.
Acquiring Careem would also result in Uber sharing an investor with its US competitor Lyft, in which e-commerce firm Rakuten owns more than 10%.
Careem has obtained more than $770m in funding to date. It most recently raised $200m from Rakuten, travel agency Al Tayyar, STV, the venture capital fund anchored by telecommunications firm Saudi Telecom, and investment holding company Kingdom Holding in October 2018.
Carmaker Daimler contributed to a $500m series E round in 2017 also backed by Rakuten, Saudi Telecom, Al Tayyar, Abraaj Group, DCM Ventures, Coatue Management, Beco Capital, El Sewedy Investments, Endure Capital, Lumia Capital, SQM Frontier and Wamda Capital.
STC Ventures, a subsidiary of Al Tayyar Saudi Telecom, previously took part in a $60m series C round in 2015 alongside Abraaj, Beco Capital, Lumia Capital, Wamda Capital and Impulse, a subsidiary of sovereign wealth fund Kuwait Investment Authority.
Careem had already secured $1.7m in a 2013 round led by STC Ventures. The same corporate returned the following year to participated in a $10m series B round led by Al Tayyar.
