(Reuters) – Uber Technologies Inc will announce plans to acquire Dubai-based rival Careem Networks FZ as early as this week, Bloomberg reported on Sunday, citing people familiar with the matter.
Careem as a brand will remain for a period of time but will eventually disappear as the operation will become entirely Uber, according to the source.
According to Bloomberg, The U.S. ride-hailing giant will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem, the people said, asking not to identified because the talks are private. The notes will be convertible into Uber shares at a price equal to $55 per share, according to the term-sheet seen by Bloomberg.
Uber’s acquisition of Careem would come ahead of its imminent initial public offering, which could be one of the New York Stock Exchange’s biggest-ever listings. Uber is expected to publicly file for an IPO in April, kicking off a listing that could value the company at as much as $120 billion, people familiar with the plans have said previously.
Careem: The First Unicorn in the Middle East
Careem, whose backers include Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce giant Rakuten, reached a $1bn valuation in 2016. Set up in July 2012 in Dubai, the company now operates in more than 120 cities in 15 countries in the Middle East, Turkey and Pakistan serving 33 million customers.
Careem declined comment while Uber did not immediately respond to a request from Reuters comment.
Uber has been preparing for an initial public offering, and its bankers have indicated that it could be valued at as much as $120 billion.