Uber, a US based ride hailing company, is in “preliminary talks” with Middle East based competitor Careem to strike a deal. Its too early to speculate but the reports by Bloomberg, tells the beginning of strategic talks between the two parties.
In its discussions with Careem, Uber has said that it would need to own more than half of the combined company, if not buy Careem outright, according to the people familiar with the talks.
Maha Abouelenein, spokeswoman from Careem, declined to comment on a deal but added that
Our ambition is to build a lasting institution for the region and that means focusing on growth into new markets and doubling down on our existing cities to open our platform up to new products and services. We are only getting started
According to Bloomberg, under one proposed arrangement, Careem’s current leaders would manage the new combined business on a day-to-day basis while retaining one or both of the companies’ local brands, the people said. Another proposal would have Uber acquire Careem. The people also said that discussions have been ongoing and may not result in a deal.
Careem is ahead of Uber in Pakistan and a strong second player to Uber in asian and middle eastern markets including UAE, Egypt, Saudi Arabia, Morocco, Lebanon, Turkey, and more.
Dubai-based Careem has 12 million customers in 80 cities worldwide and is a market leader in most of them
Both companies have also been planning for a potential IPO next year. Careem in early 2019 while Uber is also preparing for its IPO in 2019. According to Bloomberg, Uber CEO Dara Khosrowshahi said in May that he believed Uber was competitive in India, the Middle East, and Africa, and would ultimately be “the winning player in those markets and we’re going to control our own destiny.”