Uber announced on Tuesday its acquisition of Careem's business, from Morocco to Pakistan, while still letting the latter operate as an independent brand under its current management.
According to a press release from Uber CEO Dara Khosrowshahi, the company "intends to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha."
Speaking about the decision to let Careem operate as an independent brand and operate separately, Khosrowshahi said: "After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each.
He added: "Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region."
The press release further announced that the acquisition is subject to regulatory approval in various countries, which is not expected to be acquired until 2020.
It further explained that since both companies will continue to largely operate separately after the acquisition, "very little will change in either teams’ day-to-day operations post-close."
The deal will see Uber pay $1.4 billion in cash and the rest in notes convertible to Uber shares.
Dubai-based Careem boasts more than a million drivers and 30 million users across 90 cities.
Uber Technologies Inc, a US-based global logistics and transportation company, has been seeking new avenues of growth even as it faces severe competition in its core business of ride hailing from rivals like Lyft Inc.
The IPOs of Lyft and Uber represent a watershed for Silicon Valley's technology unicorns, which for years have snubbed the stock market in favour of raising capital privately, with investors happy to back their frothy valuations.