Uber eyes Middle East with $3.1B acquisition of Careem

Careem, a United Arab Emirates-based ride-hailing business, will be acquired by Uber via a $3.1 billion deal.

The purchase price will be split between $1.4 billion in cash and $1.7 billion in convertible notes, Uber said when confirming the acquisition this week.

Careem has diversified from its original ride-hail business to include delivery services and a digital payments business.

Uber is acquiring the entire portfolio of operations and will continue with the Careem brand name and team, it says.

The deal is the first major strategy expansion for Uber since it pulled out of Southeast Asia in 2018.

It also follows Uber's decision to list on the financial markets by way of an initial public offering, also announced in late 2018.

Uber CEO Dara Khosrowshahi says: "This is an important moment for Uber as we continue to expand the strength of our platform around the world.

"With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region."

The strategic switch to the Middle East come exactly a year to the day that Uber's interests in Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines were curtailed after it secured a deal to offload its interests in the region to Grab.

The deal followed similar restructuring in 2016, when it got out of China by way of an agreement with Didi, plus 2017's decision to leave Russia and sell to Yandex.

At the time, Khosrowshahi said a "potential danger" of its global strategy was taking too many battles on too many fronts against too many competitors.

He argued that the best strategy for Uber was to focus on "organic growth," through providing the "best products, services and technology in the world," alongside internal and external efforts to rebuild the brand.

Uber hopes to close the Careem acquisition in the first quarter of 2020.