Uber and Careem have reached an agreement for Uber to acquire Careem for $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash.

The acquisition of Careem is subject to applicable regulatory approvals.
The companies expect the transaction to close in Q1 2020.

Uber will acquire all of Careem’s mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan, with major markets including Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates.

Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand. Careem co-founder and CEO Mudassir Sheikha will lead the Careem business, which will report to its own board made up of three representatives from Uber and two representatives from Careem. Careem and Uber will operate their respective regional services and independent brands.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region. Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world,” said Uber CEO, Dara Khosrowshahi.

The transaction will speed up the delivery of digital services to people in the region through the development of a consumer-facing super-app that offers services such as Careem’s digital payment platform (Careem Pay) and last-mile delivery (Careem NOW).

Careem had raised less than $800 million from investors and as of October had a $2 billion valuation. Its backers include German car maker Daimler AG , Chinese ride-hailing company Didi Chuxing, Japanese internet company Rakuten Inc and Saudi investor Kingdom Holding Company.

Uber will kick of its IPO next month and is expected to receive a valuation of at least $100 billion.

Uber operates in more than 70 countries, but faces strong rivals in Latin America and India, and tough regulations in Europe.