Uber Technologies Inc. is in talks to acquire its U.A.E-based competitor Careem Networks FZ as it looks to grow its business in the Middle East region, according to a recently published report by Bloomberg citing sources close to the matter.
The San Francisco, California-based ride-hailing giant could buy Careem in a transaction valued in between $2 billion to $2.5 billion, according to the report. The two companies are in discussions and Careem’s management is trying to convince its stakeholders about the merits of a merger. However, the negotiations haven’t reached any result so far and the deal may not go through.
Careem said in a statement that there is huge and untapped customer internet opportunity in the region and the world has started to embrace this opportunity over the last couple of years. The company added that several strategic and financial investors have approached Careem.
Both the companies initially held discussion in July to merge their ride-hailing services in the Middle East, trying to settle a costly competition in the region. Uber wanted to control more than half of the joint company and had also tried to buy Careem completely, according to the report.
Any deal with Uber could prevent a possible IPO. Earlier this year, Careem held discussions with investors to raise $500 million that potentially valued the company at around $1.5 billion, the report said. In a 2016 fund rounding, it was valued just above $1 billion that made it one of the most valuable tech startups in the region.
Careem has more than one million drivers and it is offering its services in more than 100 cities in the U.A.E, Saudi Arabia, Qatar, Sudan, Bahrain, Iraq, Lebanon, Palestine, Pakistan, Turkey, Kuwait, Jordan, Egypt and Morocco. Users can book rides on cars, bikes, rickshaws and boats through the app, beside scheduling deliveries.