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Uber Completes Careem Acquisition: What the $3.1 Billion Deal Included

Uber completed the Careem acquisition on January 2, 2020. The announced maximum price was about $3.1 billion; a later filing reported $3.003 billion in acquisition-date fair value.
From TheFinanceBase Team2 min to read
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Uber completed its acquisition of Careem on January 2, 2020, making Careem Networks FZ-LLC a wholly owned subsidiary while retaining the Careem brand. The announced maximum aggregate purchase price was approximately $3.1 billion, but Uber later reported a different figure—$3.003 billion—as the acquisition-date fair value of consideration. Those amounts describe different measures of the transaction.

What Uber acquired

Uber described the acquired businesses as Careem’s mobility, delivery, and payments operations across the greater Middle East, including major markets Egypt, Jordan, Saudi Arabia, and the UAE. The acquisition brought those businesses under Uber ownership; it did not mean every country’s operations transferred on the same date.

At closing, regulatory approvals had been obtained in Egypt, Jordan, Saudi Arabia, and the UAE. Uber’s January 2, 2020 SEC filing said Careem businesses in Pakistan, Qatar, and Morocco remained pending local regulatory approvals. This describes the status reported at closing, not the status of those businesses today. Uber’s Form 8-K

Why the deal is described as both $3.1 billion and $3.003 billion

The figures refer to different transaction measures and should not be treated as competing reports of one exact cash price.

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Figure What it means
Approximately $3.1 billion Maximum aggregate purchase price Uber announced when confirming the acquisition close on January 2, 2020. Uber’s closing announcement
$3.003 billion Acquisition-date fair value of consideration reported in Uber’s Form 10-Q for the quarter ended September 30, 2020. Uber’s 2020 Form 10-Q

Uber’s 2019 proposal described approximately $1.7 billion in convertible notes and $1.4 billion in cash, subject to transaction terms and adjustments. Uber’s proposed-deal announcement In its later accounting disclosure, Uber itemized the $3.003 billion acquisition-date fair value as $1.326 billion cash paid, $1.634 billion in non-interest-bearing unsecured convertible notes, and smaller additional components. The proposal’s rounded amounts and the later accounting values are not interchangeable: one describes announced transaction terms, while the other is the consideration’s fair value at acquisition for accounting purposes.

How Careem was expected to operate after closing

Uber said Careem co-founder and CEO Mudassir Sheikha would continue leading the business. The announced board structure included three Uber representatives and two Careem representatives. Uber also said the companies would operate their regional services and independent brands in parallel, with Careem retaining its name. These were the arrangements announced at closing, not a description of Careem’s present-day corporate or operating structure.

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Uber CEO Dara Khosrowshahi framed the rationale as combining distinct strengths while running the platforms in parallel: “Working in parallel, our two platforms will be able to build upon the unique strengths of each, to the benefit of drivers, riders, and the cities we serve across the greater Middle East.” Uber’s closing announcement

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