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Uber buys competing Careem in $3.1 bn deal to dominate ride hailing in West Asia

 San Francisco, California: Worldwide to bring Uber Technologies Inc will invest $3.1 billion to obtain West Asia rival Careem, purchasing dominance at an aggressive region ahead of the hotly anticipated initial public offering. Uber said late Monday night it’d pay $1.4 billion in cash and $1.7 billion in convertible banknotes at a deal which gives it complete ownership of Careem. The long-anticipated agreement ends more than 9 months of start and stop negotiations between the two businesses and gives Uber the much-needed victory following a series of overseas divestments.

 The notes will be convertible into Uber shares at a cost equal to $55 apiece, Uber said, signaling about a nearly 13% increase over Uber’s share price in its last funding Round, led by SoftBank Group Corp over one year ago. The purchase makes Careem a wholly owned subsidiary of Uber and will continue to save the Careem brand and program intact, at least initially. Careem co-founders Mudassir Sheikha, Magnus Olsson, and Abdulla Elyas are staying on with Careem following the purchase, the companies said. But, Careem’s board will be overhauled, with three chairs going to Uber reps and 2 belonging to Careem.

 Sheikha, who’s Careem’s Chief executive officer, and Olsson may have board chairs. A Uber spokesman declined to say whom Uber will nominate to the board. The $3.1 Billion Money and purchase of shares buy all out Careem investors, the companies said, and also Careem stock will be converted to Uber equity. Careem had raised less than $800 million from shareholders and as of October had a $2 billion valuation. His supporters include German car manufacturer Daimler AG, Chinese ride-hailing company Didi Chuxing, Japanese web company Rakuten Inc and also Saudi investor Kingdom Holding Company. The deal is anticipated to close in the first quarter of 2020, the companies said, which means it won’t be reflected in Uber’s first pair of quarterly earnings releases as a public firm, although it’s going to probably be disclosed in a public IPO filing.

 Uber will kick off its IPO next month and is likely to receive a valuation of at least $100 billion. The arrangement is subject to regulatory acceptance, including by antitrust officials from the states Where Careem operates, which might prevent the deal from moving forward or induce the companies to modify the terms. Months of negotiations. The deal is especially essential for Uber, whose capability to be an aggressive worldwide Ride hailing participant had come into question after it sold its operations in China, Russia, and Southeast Asia to local competitions after sustaining heavy losses. Uber Chief Executive Dara Khosrowshahi in a statement known as the deal with Kareem an essential moment for Uber. Uber has been excited to achieve a deal before the company starts its tour when it’ll meet with people market investors prior to listing shares on the NY Stock Exchange. The agreement allows Uber to maintain dominance in a developing region for ride-hailing outside the USA.