Uber is set to announce $3.1 billion acquisition of its Middle East rival, Careem in a cash and stock deal as early as this Tuesday, according to sources familiar with the matter.
Uber will be paying $1.4 billion in cash and $1.7 billion in convertibles, according to a Bloomberg report. The notes will be convertible into Uber shares at a price equal to $55 per share.
The acquisition comes ahead of Uber’s long-awaited IPO next month, expected to value it at $120 billion. The company has chosen the New York Stock Exchange to list its shares.
The landmark acquisition deal happens at a time when Lyft, Uber’s American rival, is expected to debut on Nasdaq in the next few weeks in an IPO that could value the company at $25 billion. 
With the acquisition of Careem, a dominant player in the Middle East, Uber will have a virtual monopoly in the Mena region, and will make it even more attractive for investors, analysts said.
Shareholders in Careem, including Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc., have reportedly been asked to agree to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday.
Careem, which has a much bigger footprint than Uber in the region with its services available across 15 countries and more than 100 cities including many second-tier cities, has raised close to $800 million in investments until now.
Launched in Dubai in 2012 by Mudassir Sheikha and fellow McKinsey & Co alumni Magnus Olsson, the Dubai start-up is reportedly valued at over $2 billion in its last funding round when it raised $200 million, making it one of the most valuable technology startups in the Middle East. The company has over a million drivers.
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