Uber 'in talks with Careem for merger in Middle East'
The ride-hailing companies are said to have discussed deal structures
Uber and Careem are in preliminary talks to combine their Middle East ride-hailing services, hoping to resolve a costly rivalry as Uber prepares for a public offering next year, according to three people familiar with the matter.
The companies have discussed potential deal structures, but they have not come to an agreement on the specifics, according to the people.
Uber has sold operations in South-East Asia, Russia and China, and insisted that it was done selling off its global business piecemeal.
In its discussions with Careem, Uber has said that it would need to own more than half of the combined company, if not buy Careem outright, the sources said. A spokesman for Uber declined to comment.
Under one proposed arrangement, Careem’s leaders would manage the new combined business on a day-to-day basis while retaining one or both of the companies’ local brands.
Another proposal would have Uber acquire Careem. The people also said that discussions have been ongoing and may not result in a deal.
Careem, a local favourite, is in talks with investors to raise $500 million (Dh1.83 billion), potentially valuing the Dubai ride-hailing company at about $1.5bn. It is said to have held early talks with banks about a potential IPO in January.
A Careem spokeswoman told The National: "We do not comment on rumors. Our focus remains to build the leading internet platform for the region, from the region. That means expanding to new markets and doubling down on our existing markets by adding new products and services to the platform. We are only getting started."
Uber chief executive Dara Khosrowshahi said in May that he believed Uber would come out on top in India, the Middle East and Africa. "We are going to be, I believe, the winning player in those markets and we’re going to control our own destiny," Mr Khosrowshahi said.
Uber has been slimming down its businesses outside its core markets as it prepares for its own IPO in 2019. Last year, Uber and Yandex agreed to merge their ride-hailing businesses in Russia, and are targeting an IPO of the business in 2019. In March, Uber agreed to swap its business in South East Asia for a 27.5 per cent stake in Singapore rival Grab Holdings.
Careem operates in more than 70 cities across at least 10 countries from North Africa to Pakistan, and is a leader in most of them. Its biggest market is Saudi Arabia, where Uber has been pushing plans to sign up female drivers to take advantage of the kingdom’s decision to overturn a ban on women behind the wheel.
Saudi Arabia’s sovereign wealth fund is a large investor in Uber, after acquiring a $3.5 billion stake in the company in 2016. Saudi billionaire Prince Alwaleed bin Talal’s investment vehicle Kingdom Holding, and Saudi Telecom’s venture capital arm STV, are also investors in Careem.
Updated: July 4, 2018 02:07 PM