Uber Buys Dubai-based rival Careem

Regular readers of our Vestact newsletter will know that I am eagerly awaiting the listing of ride hailing giant Uber on the New York Stock Exchange. We are told that the initial public offering (IPO) might be slated for the next few months.


Yesterday's news was that Uber is shelling out $3.1 billion to acquire Dubai-based rival Careem. According to the sources cited in a Bloomberg report, Uber paid $1.4 billion in cash and $1.7 billion in convertible bonds. The bonds will be exchangeable for Uber shares at a rate of $55 per unit.


Careem earlier raised $771.7 million over seven funding rounds, and has more than a million drivers across over 100 Middle Eastern cities. Japanese e-commerce company Rakuten Inc. and Saudi Prince Alwaleed bin Talal's investment company were its anchor investors.





In recent times, Uber has more often been a seller than a buyer. They slipped out of the Southeast Asia region by selling operations to Singapore's Grab. They sold their China operations to local rival Didi and their Russian business to Yandex. In all cases, Uber received stakes in those listed companies. Remember that Uber is also bulking up in logistics, food delivery and electric bikes and scooters.


My only concern about Uber is that when they price the IPO it will already be fully valued? According to people familiar with the matter, the listing could be set at a price that pegs their valuation at $120 billion. We shall have to wait and see what happens and decide what to do at the time.