'Careem and Uber are joining forces. We have reached an agreement in which Uber will acquire Careem for $3.1 billion,' a joint statement said.
Uber Technologies has bought Middle East rival Careem for $3.1 billion, the two companies said in a statement Tuesday.
Uber will pay Dubai-based Careem $1.4 billion in cash and another $1.7 billion in convertible notes when the deal closes, the Bloomberg reported. The transaction is expected to close in Q1 2020.
According to the report, Uber CEO Dara Khosrowshahi has cut the largest deal of his tenure.
The deal comes as San Francisco-based Uber is preparing to file in April for an initial public offering, people familiar with the matter have said.
"Uber will acquire all of Careem's mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan, with major markets including Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates," the statement said.
"This is an important moment for Uber as we continue to expand the strength of our platform around the world," Khosrowshahi said.
Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand.
Careem co-founder and CEO Mudassir Sheikha will lead the Careem business, which will report to its own board made up of three representatives from Uber and two representatives from Careem.
Sheikha welcomed the acquisition, saying it will be good for customers.
"Joining forces with Uber will help us accelerate Careem´s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires," he said.
Both the companies will operate their respective regional services and independent brands, the statement added.
The acquisition represents one of the largest technology deals in the Middle East, according to Bloomberg.