RIYADH: Saudi Telecom Company (STC) has announced that Careem, in which the Saudi Telecom Company owns a direct stake of around 8.8%, has reached an agreement with Uber on March 26, 2019 for Uber to acquire Careem for a value of around USD 3.1 billion.[the_ad id=”31605″]According to a notification issued to Tadawul, Uber would pay around USD 1.4 billion in cash and around USD 1.7 billion in Uber’s convertible notes, subject to adjustments. The Transaction is expected to be closed after obtaining the necessary regulatory approvals.
The amount that the Saudi Telecom Company will be receiving from the transaction will be around USD 274 million, partly in cash and partly in Uber’s convertible notes, with the exact split depending on the final allocation at the closing of the transaction.
It is worth mentioning that the STC’s investment in Careem was made in January 2017 for an amount of USD 100 million.
In addition to the Company’s direct investment in Careem, the STCC has invested indirectly in Careem through two owned funds, which are: STC Ventures (STCV), which owns a 6.4% stake and Saudi Technology Ventures (STV), which owns a 2.9% stake.
With regard to the period in which the positive financial impact on the Saudi Telecom’s financials will occur, for both the direct and indirect investments, it will be determined once the transaction is finalized and the final regulatory approvals obtained.
Dubai based Careem, founded in 2012, claims more than 30 million registered users and sells car-hailing services in 120 cities across North Africa, the Middle East and South Asia, from Morocco to Pakistan.
The companies characterized the deal as the biggest-ever technology industry transaction in the greater Middle East.
The announcement comes as Uber approaches a much-anticipated initial public offering that reports have said could value the firm at as much as USD 120 billion. It is expected to be one of the biggest tech IPOs in history.