Uber Set to Purchase Dubai-Based Rival Careem for a 3.1 Billion USD Deal

E-taxi corporation Uber has plans to Dubai based rival Careem Networks FZ for 3.1 billion USD.

However, the American taxi app is yet to make the acquisition deal official.

In the just concluded purchase plans, Uber is set to pay 1.4 billion USD in cash and 1.7 billion USD in short-term debt that will later turn into equity.

According to Bloomberg, the convertible notes will be turned into Uber shares based on an existing-term sheet.

Saudi Prince Alwaleed bin Talal’s investment firm and Rakuten Inc. are Careem’s most prominent shareholders with Rakuten Inc. being set to suggest deal amendments before the deal going official.

The purchase, which may be one of Uber’s most expensive acquisitions, will precede the company’s initial public offering (IPO) at the New York Stock Exchange (NYSE).

The IPO may also be NYSE’s most extensive listings of all time. Upon listing in the NYSE, a development that has severally been teased in the past, Uber’s value could be as much as 120 billion USD.

The company is most popular in the Middle East, and highly-valued startup after releasing a 1 billion USD of value in 2016. The company has more than one million drivers serving more than 90 cities in 15 states. Its acquisition by Uber will see the e-taxi pioneer cement its position in Careem’s market.

Uber has previously been subjected to several hurdles which included administration issues something which made the company’s co-founder and CEO resign.

Uber has in the past engaged expensive deals to counter costlier foreign operations for stakes in competing products, and therefore the development implies a new strategy.

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