Uber has completed the acquisition of its Middle Eastern rival Careem, the San Francisco-headquartered company announced today in a statement, saying Careem has become a wholly-owned subsidiary of Uber, preserving its brand.
The $3.1 billion acquisition which is the largest exit for a Middle Eastern startup was first announced in March last year.
Mudassir Sheikha, the co-founder and CEO of Careem will continue to lead its business and report to a board made up of three representatives from Uber and two from Careem. Both companies will continue to operate their respective regional services and independent brands.
Even though both the companies will operate independently, Uber’s IPO filings indicated that they will share consumer demand and driver supply across both the platforms which naturally would result in the removal of subsidies for both these sides of the marketplace.
The filing says, “We have structured the acquisition and proposed integration of Careem with the goal of preserving the strengths of both companies, including opportunities to create operating efficiencies across both platforms. We expect to share consumer demand and Driver supply across both platforms, thereby increasing network density and reducing wait times for consumers and Drivers in the region, while simultaneously achieving synergies from combining back-end support functions and shared technology infrastructure.”
“With the closing of the deal, Uber has acquired Careem’s mobility, delivery, and payments businesses across the greater Middle East region, with major markets including Egypt, Jordan, Saudi Arabia, and the United Arab Emirates,” said the statement.
The regulatory approvals from the United Arab Emirates, Jordan, and Egypt were announced previously. Egyptian competition watchdog which was one of the most vocal critics of the merger approved the deal with some conditions last week.
The statement also explained that the two companies are still in process to obtain regulatory approvals in Pakistan, Qatar, and Morocco, and the transaction in these markets will not close until the approvals have been obtained. Qatar had previously blocked the deal.
Dara KhosrowshahiI, the CEO of Uber, said, “I’m looking forward to seeing even more innovation from Careem, as they continue to operate independently under their current leadership. Working in parallel, our two platforms will be able to build upon the unique strengths of each, to the benefit of drivers, riders, and the cities we serve across the greater Middle East.”
Mudassir Sheikha, the co-founder and CEO of Careem, said, “Today marks the beginning of a new chapter for Careem. The journey that we started almost a decade ago to simplify the lives of people in the greater Middle East is far from over. Joining forces with Uber accelerates that journey as we become the region’s everyday super app. We are excited to take Careem to new heights alongside Uber, who appreciates the significant regional opportunity, is supportive of our values and culture, and believes in the purpose that drives us.”
The statement said that both the companies believe that the completed acquisition will provide an opportunity to expand the variety and reliability of the services offered through their applications, “Similarly, for drivers and captains, the companies believe an increase in trip growth and improved services could provide better economic opportunities as well as more predictable earnings through greater utilization of drivers’ time on the road.”