Uber is strengthening its reach in the Middle East.
The ride-hailing giant on Tuesday said it'll acquire its Middle East competitor Careem for $3.1 billion -- Uber's largest acquisition to date. The buyout is expected to be completed in the beginning of 2020, though it's still subject to regulatory approval.
"This is an important moment for Uber as we continue to expand the strength of our platform around the world," Uber CEO Dara Khosrowshahi said in a blog post. "Working closely with Careem's founders, I'm confident we will deliver exceptional outcomes for riders, drivers and cities, in the fast-moving part of the world."
Uber operates in more than 600 cities worldwide and is on track to go public this year at a valuation that's expected to be as much as $120 billion. As it prepares for its initial public offering, the company has been tying up loose ends, settling lawsuits, and making deals with regulators and competitors.
Uber's planned acquisition of Careem is a bit different than how the ride-hailing giant has dealt with rivals in the past. In Russia, China and Southeast Asia, Uber sold its former businesses to competitors rather than buy them out.
"After taking steps to reduce operational risk abroad through a series of divestitures, Uber appears to be reverting back to aggressive expansion," said Alejandro Ortiz, research analyst for financial firm SharesPost. "Though our recent analysis of the global ridesharing industry places Careem at holding under 1 percent of the global market, it operates in markets with the largest growth potential."
Founded in 2012, Dubai-based Careem operates in 15 countries, including markets Uber hasn't yet entered, like Iraq and Morocco. For now Uber and Careem will continue to operate independently.
The Middle East has experienced a shakeup with the influx of technology and ride-hailing over the years, especially in Saudi Arabia. In June, the country lifted the ban on women driving, which prompted Careem and Uber to say they'd start training and preparing female drivers to join their workforce.
"The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future," Mudassir Sheikha, CEO and co-founder of Careem, said in the blog post. "This is a milestone moment for us and the region, and will serve as a catalyst for the region's technology ecosystem."