Reports about US ride hailing company Uber’s possible acquisition of its Middle East based competitor Careem are going viral.
According to media reports, Uber is likely to acquire Careem this week in a $3.1 Billion worth deal.
The news is already becoming talk of the town.
What Is Uber’s Acquisition of Careem All About?
The US-based online right hailing company will pay $1.4 billion to Careem in convertible notes which will be converted into Uber’s shares, reported Bloomberg.
Till now no official statement from each company has surfaced. The deal which can limit the choice for customers who use online ride-hailing services is happening before Uber is reportedly filing for IPO in April on the New York Stock Exchange. According to a Bloomberg report, Uber’s value is estimated to be $120 billion, making it New York Stock Exchange’s likely to be the biggest ever listing.
What Can be the Possible Impact of This Deal
Experts opine that the deal can be a wise move on part of Uber as it might be an attempt of the company of offload its costs. But, at the same times, it may make customers worse off as they may not have as many options to choose from due to less competition.
Careem which is Dubai based company is operating in more than 15 cities and has diverse portfolio to offer through its app, apart from simple ride hailing service. In the countries where both Uber and Careem operate customers have advantage that they can choose any service that suits them in term of comfort level and fares.
But, after this likely deal customers may face lack of option and even consider leaving the online ride hailing service in favour of conventional means of transportation.
At least, this is what one may conclude on the basis of social media opinion of this huge corporate acquisition of coming days.
Folks are saying that it might not be wise for #Careem to accept any such deal.
A bad news for users of both the services.