Ride-hailing giant Uber is in talks to buy its Middle Eastern competitor Careem as it seeks to maintain a strong foothold in the region. The sources familiar with the matter said the transaction could value Careem at $2 billion to $2.5 billion.
The deal is still in discussions, with Careem’s management “working on selling the firm’s shareholders on the merits of a deal,” as per a report by Bloomberg. It also added that nothing has been finalized yet, and Careem may altogether decide to drop this.
The two companies had held preliminary talks regarding the idea of merging their businesses in July. They wanted to get done with the costly market competition for once and all. Uber had proposed to buy the company outright or own more than half of the combined entity. Later in August, when the two companies were inquired by the Egyptian Competition Authority, they denied having signed an acquisition agreement. The latter was concerned with the outcome of such a deal, predicting it to be anti-competitive, eventually harming the consumers. In an emailed statement, Careem is quoted saying,
We believe the consumer internet opportunity in the region is massive and untapped. In the last couple of years, the rest of the world has begun to embrace this opportunity and we have been approached by multiple strategic and financial investors. Our ambition remains to build a lasting tech institution from the region.
Uber has been witnessing its own share of ups and down in the foreign markets. The San Francisco-headquartered company has already sold its operations in Southeast Asia, China and, Russia. However, it aims to go public next year and so, it has been looking for more opportunities for growth in the markets it currently operates in, working on different segments apart from the ride-hailing services.
Founded by Magnus Olsson and Abdulla Elyas in 2012, Careem has seen a stupendous growth in the past six years. It operates in over 100 cities in 14 countries with more than a million drivers. It has raised over $571 million from the likes of German automaker Daimler AG, Japanese e-commerce giant Rakuten Inc., Didi Chuxing, among others.