KARACHI: Uber Technologies Ltd on Friday confirmed the official close of the previously announced acquisition of Careem for $3.1 billion.

Careem Networks FZ-LLC has become a wholly-owned subsidiary of Uber, preserving its brand and the Dubai-headquartered ride-hailing company’s Co-founder and CEO Mudassir Sheikha will continue to lead the Careem business, and report to a board made up of three representatives from Uber and two representatives of its own.

Careem and Uber will operate their respective regional services and independent brands.

Regulatory approval still required in Pakistan and some other markets

With the closing of the deal, Uber has acquired Careem’s mobility, delivery, and payments businesses across the greater Middle East region, with major markets including Egypt, Jordan, Saudi Arabia, and the United Arab Emirates.

The regulatory approval process in Pakistan, Qatar, and Morocco is ongoing and the transaction will not close in these territories until approvals from the legal authorities responsible are obtained.

Uber CEO Dara Khosrowshahi said: “I’m looking forward to seeing even more innovation from Careem, as they continue to operate independently under their current leadership. Working in parallel, our two platforms will be able to build upon the unique strengths of each, to the benefit of drivers, riders, and the cities we serve across the greater Middle East.”

The San Francisco-based ride-hailing giant in March 2019 had announced to buy its Middle Eastern rival ahead of its IPO to boost its market value further and raised $8.1bn at a price of $45 per share. However, after listing on the New York Stock Exchange, the company’s stocks began a downward journey and on Thursday closed at $30.99, reflecting a loss of 31.13 per cent of its first IPO value.

The disappointing reception by the public markets came after Uber in its S-1 filing had indicated that it might not become profitable in the foreseeable future. In fact, the last financial results published give the company’s 9MCY19 operational losses at a staggering $7.625bn.

Published in Dawn, January 4th, 2020