U.S ride hailing giant, Uber Technologies Inc. is ready to announce a $3.1 billion cash and share deal to acquire their Dubai-based competitor, Careem Networks this week. Uber will pay $1.4 billion in cash and $.7 billion in convertible notes for Careem. The notes will be converted into Uber shares at a price equal to $55 per share.
Uber’s acquisition of Careem would come before its initial public offering. The ride hailing company has made moves to list on New York Stock Exchange which could be one of the biggest-ever listings. The listing could value the company at as much as $120 billion.
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Valued at about $1 billion in a 2016 funding round, Careem became one of the most valuable technology startups in the Middle East. They have up to a million drivers and operate in over 90 cities in 15 countries. Careem recently launched a free in-ride insurance programme for both passengers and Captains in all 15 countries of its operation.
The firm would pay up to $20,000 to cover expenses related to death or serious injury caused by accidents during a Careem ride. The insurance for drivers is effective from the moment the app is online and available to pick up passengers, through the trip to pick-up the passenger until the passenger gets to their destination.
The shareholders in Careem, have been asked to agree to the terms of the transaction by Monday evening so a deal could be announced as soon as Tuesday. This deal would signal Uber’s commitment to the Middle East.
