US: Uber buys Careem For US$3B

Uber, the ride-hailing startup, is reportedly gearing up to make a US$3 billion bid for Careem Networks, the Dubai-based ride-hailing company.

According to a report in Reuters, citing sources familiar with the deal, Uber could make the offer during the early part of the week. Uber is offering US$1.4 billion in cash and US$1.7 billion in convertible notes, which can be converted to Uber shares at a price of US$55 per share. Neither side commented on the report.

Uber’s revenue was US$11.3 billion in 2018, while its gross bookings from rides totaled US$50 billion. However, the company lost US$3.3 billion, excluding gains from the sale of its business units in Russia and Southeast Asia.

The potential move comes as Uber is gearing up to launch an initial public offering (IPO) that could value the ride-hailing startup as high as US$120 billion, and as rival Lyft is also gearing up for its own IPO. According to recent reports, Lyft is set to launch its roadshow ahead of an IPO, and could get a valuation of between US$21 billion and US$23 billion. Lyft aims to trade on the Nasdaq Stock Market with the symbol LYFT by the end of March.

Citing sources, Reuters reported at the time that Lyft will present itself to investors as a better bet than its chief ride-hailing rival Uber, which has branched out into areas such as food delivery and freight hauling. As part of the IPO, Lyft will offer one-time cash bonuses to drivers, who can use them to buy shares if desired. The company is set to pay the bonuses to employees around March 19, with those who have logged at least 10,000 rides by February 25 eligible for a US$1,000 bonus and those with 20,000 rides to receive a US$10,000 bonus.