US ride-hailing giant Uber’s acquisition of Dubai-based rival Careem Networks FZ could be completed on Tuesday this week.
This website reported in February that the two companies were in talks over the takeover.
And now it has emerged that talks over a $3.1 billion cash-and-share deal are in advanced stages and an announcement of the breakthrough is in the pipeline.
According to Bloomberg News, the US company will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem.
The notes will be convertible into Uber shares at a price equal to $55 per share, Bloomberg adds.
Careem shareholders are said to be in the final stages of agreeing to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday.
Careem is backed by Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc.
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Uber hopes that it is planned acquisition of Careem boosts its imminent initial public offering (IPO) on the New York Stock Exchange.
According to Bloomberg, 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.
The US company is also expected to use the deal to expand its operations in the Middle East, where one of its biggest investors — Saudi Arabia’s sovereign wealth fund — is based.
The acquisition would also be a departure in strategy for Uber, which in the past has used such deals to offload costly overseas operations in exchange for stakes in competitors, Bloomberg adds.
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