Dubai's skyline. Picture: ISTOCK
Dubai's skyline. Picture: ISTOCK

Ride-hailing company Uber Technologies has agreed to buy Middle East-focused rival operator Careem for $3.1bn (R44.4bn).

Uber said in a statement on its website that Careem would become a wholly-owned subsidiary but would operate as an independent company under its own brand, and led by its founders.

The deal, subject to regulatory approvals, is expected to close in the first quarter of 2020, Uber said.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world,” CEO Dara Khosrowshahi said in a statement.

Careem was “one of the most successful start-ups” in the Middle East, Khosrowshahi said.

He said in a letter to employees that keeping Careem as an independent brand “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”. 

Uber is expected to make its listing plans public in coming weeks, according to a recent Bloomberg report. The company is expected to have a valuation of at least $100bn.

It will settle the Careem acquisition using $1.7bn in convertible notes and $1.4bn in cash.

Established in July 2012, Careem operates in 120 cities across 15 countries, including the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, Lebanon, Pakistan, Kuwait, Egypt, Morocco, Jordan, Turkey, Palestine, Iraq and Sudan.

JSE-listed mobile operator MTN has a large stake in a popular ride-hailing app in Iran, called Snapp.

The app, which operates mainly in Tehran, was launched in 2014 as Iran’s answer to Uber, which is banned in that country.

MTN has other ride-hailing interests in the Middle East, including a platform called Easy Taxi.

hedleyn@businesslive.co.za