Uber A Step Closer To Buying Middle Eastern Rival Careem
Zacks Investment Research | Dec 29, 2019 09:51PM ET
Uber Technologies (NYSE:UBER) has moved a step closer to buying Dubai-based firm, Careem, following the conditional approval of the same from Egyptian regulator — the Egyptian Competition Authority (“ECA”).
Notably, Uber, based in San Francisco, CA, inked a deal to acquire Careem — a provider of ridesharing, meal delivery and payment services across the Middle East, North Africa and Pakistan — for a total consideration of roughly $3.1 billion. Out of $3.1 billion, approximately $1.4 billion will be in cash and the balance will be paid through non-interest-bearing unsecured convertible notes. Notably, both Uber, which competes with the likes of Lyft (NASDAQ:LYFT) in the ride-hailing space, and Careem have operated in Egypt since 2014.
The deal, announced in March, is expected to close in January 2020. Following the closure, Careem will become a wholly-owned subsidiary of Uber. However, it will continue to function with independent management and as an independent brand.
The Egyptian competition watchdog, however, gave its nod to the impending merger subject to certain conditions. Per the conditions, if the companies decide to raise prices they will have to comply with an ECA-imposed cap. Moreover, the maximum value of the surge multiplier cannot exceed 2.5. Notably, Zacks Investment Research
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