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Uber in talks to merge Middle Eastern operations with Careem: Bloomberg
Posted on Wednesday, 04 July 2018 09:13
Uber Technologies has entered into preliminary talks with Dubai’s Careem Networks in hopes of combining their ride-hailing assets in the Middle East, Bloomberg reported, citing three people close to the matter.
According to these sources, who asked not to be named as the situation remains private, a number of potential alternatives are being discussed but are yet to be finalised.
These options include Uber owning more than half of the combined business, Careem managing the new company on a day-to-day basis while also retaining one or both of the companies’ brands, or a potential proposal by the US ride-sharing giant to acquire its United Arab Emirates-based rival, the people noted.
News of a tie-up comes ahead of Uber’s planned initial public offering (IPO) next year.
Details of the possible flotation have not been disclosed as of yet; however, in its latest investment the company had a valuation of USD 48.00 billion.
This deal involved a consortium of stockholders, namely, Softbank, TPG Capital, Sequoia Capital, Tencent Holding and Dragoneer Investment Group, securing 17.5 per cent of Uber in a deal worth USD 7.75 billion in January 2018.
Dara Khosrowshahi, chief executive of the business, which has become one of the most popular modes of transport worldwide in recent years, believes the company will become the leader in the ride-hailing field in India, the Middle East and Africa.
However, Uber has been slimming down its operations as it prepares for its 2019 listing, including merging with Yandex in Russia and offloading its Southeast Asia operations in exchange for a 27.5 per cent stake in Singapore-based Grab Holdings.
A spokeswoman for Careem, which has operations in over 100 cities and 14 countries, did not confirm or deny the report when contacted by Reuters and told Bloomberg that the group is only just getting started with expansion plans.
The company is said to be discussing a USD 500.00 million funding round with investors that could value the business at USD 1.50 billion, as well as holding talks with banks regarding a potential IPO for January 2019, according to the news provider.
Ride-hailing platforms have been active in the field of mergers, acquisitions and investments in recent months, with scooter and bike-sharing startup Lime Bike seeking USD 250.00 million in cash, valuing it at around USD 1.00 billion, media reports suggested in June.
Additionally, US-based Lyft is said to be considering an acquisition of Motivate in a potential USD 250.00 million deal, the Information suggested last month.
Earlier this year, the Wall Street Journal observed that Uber’s Chinese rival Didi Chuxing is exploring an IPO that could value the business at between USD 70.00 billion to USD 80.00 billion and is expected to occur in the second half of 2018.
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