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Tue 26 Mar 2019 06:04 PM

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What Dubai's ruler thinks of Uber's $3.1bn deal for Careem

Sheikh Mohammed says decision to set up Dubai Internet City 20 years ago paved way for landmark deal

What Dubai's ruler thinks of Uber's $3.1bn deal for Careem

Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum on Tuesday hailed Careem and e-commerce firm Souq.com for emerging from the "deserts of Dubai".

Sheikh Mohammed, also Prime Minister and Vice President of the UAE, said the acquisition of both companies by global giants justified the emirate's decision to prioritise the internet and e-commerce 20 years ago with the launch of Dubai Internet City.

In a tweet, he said: "In 1999, many people questioned our idea to establish Dubai Internet City in the desert. Two years ago, Amazon acquired the multi-billion dirham Souq.com  and today, Uber acquired Careem for AED11 billion. These giant companies flourished from the 'desert' of Dubai."

Uber earlier reached an agreement to acquire Careem for $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. The acquisition of Careem is subject to applicable regulatory approvals and the transaction is expected to close early in 2020.

The deal came two years after global e-commerce giant Amazon.com agreed to buy Souq.com.

Both companies are members of Dubai Internet City which announced last year that its community had collectively attracted AED7.8 billion ($2.1 billion) in funding since its launch.

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 UAE.

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.

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

The deal comes as the greater Middle East region is already seeing the economic and social benefits of rapid technology adoption and improved access to transportation.

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