NEWS DESK
\nSAN FRANCISCO
\nGlobal ride-hailing firm Uber Technologies will spend $3.1 billion to acquire Middle East rival Careem, buying dominance in a competitive region ahead of a hotly anticipated initial public offering.
\nUber said late Monday night it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem. The long-expected agreement ends more than nine months of start-and-stop negotiations between the two companies and hands Uber a much-needed victory after a series of overseas divestments.
\nThe notes will be convertible into Uber shares at a price equal to $55 apiece, Uber said, marking about a nearly 13 percent increase over Uber\u2019s share price in its last financing round, led by SoftBank Group Corp more than a year ago.
\nThe acquisition makes Careem a wholly owned subsidiary of Uber and will keep the Careem brand and app intact, at least initially. Careem co-founders Mudassir Sheikha, Magnus Olsson and Abdulla Elyas are staying on with Careem following the acquisition, the companies said.
\nHowever, Careem\u2019s board will be overhauled, with three seats going to Uber representatives and two belonging to Careem. Sheikha, who is Careem\u2019s CEO, and Olsson will have board seats. An Uber spokesman declined to say whom Uber would appoint to the board.
\nThe $3.1 billion cash-and-stock purchase buys out all outside Careem investors, the companies said, and Careem stock will be converted into Uber equity. Careem had raised less than $800 million from investors and as of October had a $2 billion valuation. Its backers include German car maker Daimler AG , Chinese ride-hailing company Didi Chuxing, Japanese internet company Rakuten Inc and Saudi investor Kingdom Holding Company.
\nThe deal is expected to close in the first quarter of 2020, the companies said, meaning it will not be reflected in Uber\u2019s first couple of quarterly earnings releases as a public company, although it will likely be disclosed in a public IPO filing. Uber will kick of its IPO next month and is expected to receive a valuation of at least $100 billion.
\nThe agreement is subject to regulatory approval, including by antitrust officials in the countries where Careem operates, which could prevent the deal from moving forward or compel the companies to modify the terms.
\nMONTHS OF NEGOTIATIONS
\nThe deal is particularly important for Uber, whose ability to be a competitive global ride-hailing player had come into question after it sold its operations in China, Russia and Southeast Asia to local rivals after sustaining heavy losses.
\nUber Chief Executive Dara Khosrowshahi in a statement called the deal with Careem \u201can important moment for Uber.\u201d
\nUber has been eager to reach an agreement before the company begins its \u201croadshow,\u201d when it will meet with public market investors prior to listing shares on the New York Stock Exchange. The deal enables Uber to claim dominance in a growing region for ride-hailing outside of the United States.
\nUber operates in more than 70 countries, but faces strong rivals in Latin America and India, and tough regulations in Europe.
\nTalks between the companies had dragged on since at least last summer, sources told Reuters, although they did not get serious until the end of the year. <\/p>\n","protected":false},"excerpt":{"rendered":"
NEWS DESK SAN FRANCISCO Global ride-hailing firm Uber Technologies will spend $3.1 billion to acquire Middle East rival Careem, buying dominance in a competitive region ahead of a hotly anticipated initial public offering. Uber said late Monday night it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-56131","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n