Late on Monday, the ride-hailing app group said it would pay $1.4bn in cash and $1.7bn in convertible notes to take full ownership of Careem.
Uber said the notes will convert into its shares at a price equal to $55 each, a near 13% increase over Uber’s share price in its last financing round, led by Japan’s SoftBank over a year ago.
The long-expected deal ends months of negotiations between the two companies.
Dubai-based Careem, which was founded in 2012, operates in 98 cities in the Middle East, North Africa, Pakistan, and Turkey, compared with Uber’s roughly 23 locations in the region. Uber operates in more than 70 countries.
The deal is expected to close in the first quarter of 2020, the companies said, meaning it will likely be disclosed in Uber’s initial public offering (IPO) filing.
The group is forecast to kick off its IPO, expected to be on the New York Stock Exchange, next month, with the group likely to be valued at least at $100bn.