Uber has confirmed that it will acquire Dubai-based ride-hailing app Careem for $3.1 billion in Q1 of 2020, in the Middle East's largest technology transaction, according to the US mobility giant.
The acquisition, which will consist of $1.7bn in convertible notes and $1.4bn in cash, will see Careem become a wholly-owned subsidiary of Uber, but will continue operating as an independent company under the Careem brand and its founders Mudassir Sheikha and Magnus Olsson.
Uber will acquire all of Careem's mobility, delivery, and payments businesses across the Middle East including in Morocco, Pakistan, Egypt, Jordan, Pakistan, Saudi Arabia and the UAE.
The movie will aim to "rapidly expand and capitalise on the region's underpenetrated mobility opportunity and growing digital economy", according to a statement by Uber.
It also insisted that Careem will be "preserving its brand" and will report to its own board made up of three representatives from Uber and two representatives from Careem.
In an email to Uber staff, company CEO Dara Khosrowshahi said by keeping Careem independent, it would allow the company to "build new products and try new ideas across not one, but two, strong brands, with strong operators within each".
"Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region," he said.
Careem CEO and co-founder Mudassir Sheikha said, "the mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future".
"We could not have found a better partner than Uber under Dara's leadership to realise this opportunity. This is a milestone moment for us and the region, and will serve as a catalyst for the region's technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors," he added.
The transaction is expected to provide better work opportunities with higher earnings for drivers and captains of both companies, the Uber statement said.