"Ober" buys "Karim" … a new transport map in the Arab region



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Arab media have criticized Opere Technologies' monopoly on the region's taxi applications market following the acquisition of rival Karim in a $ 3.1 billion deal amid concern among consumers, particularly in Arab countries, with the rise of prices.
Ober said in a statement yesterday that it expects to close its acquisition of Karim in the first quarter of 2020.

The agreement provides for $ 1.4 billion in cash for Karim's shareholders and $ 1.7 billion in convertible securities, the company said. Under the terms of the agreement, Karim, which is active in the Arab region, will become fully controlled and operated by Ober, but will operate as an independent company under the Karim brand and led by the company's current founders.
The deal raised concerns about the two companies in the Arab region, amid questions about the possibility of price increases that would cause them severe damage, especially that Ober will become the largest in the region.

Prior to the recent deal, Ober and Karim were offering strong deals, including price cuts to lure customers, amid a fierce competition between companies operating in the same area as taxi booking requests.

Egyptian consumer protection association president Suad al-Deeb said in a press release that the competition law requires both companies to notify the agency before the agreement is officially signed. The two companies are not entitled to agree before obtaining an exemption from the agency. This is the case.

Al-Deeb said that Obr is trying to make up for its previous losses in this business. The competition with Karim and other companies caused losses. Upon completion of the deal, Ober will be the market monopoly in the Arab region. That no one can control the company.
According to Ober authorities, the agreement is subject to regulatory approval, including antitrust authorities in countries where Karim operates, which may prevent the deal from being finalized or the two companies are forced to change terms.

In a statement, Ober's chief executive officer, Dara Khososhahi, described the deal with Karim as "an important moment for Uber." The agreement allows Uber to announce its hegemony in a growing area of ‚Äč‚Äčtaxi applications outside the United States.
Two well-known sources confirmed to Reuters yesterday that Ober was about to make an offer of more than $ 3 billion to buy Dubai-based competitor Karim in an agreement that would boost its operations in the Arab region.

The agreement comes before UPR's initial public offering, in which the company's value could be estimated at $ 120 billion.
Karim was founded in 2012 and has a larger presence in the Arab region, Pakistan and Turkey, operating in 98 cities.

"A merger between Ober and Karim highlights the huge opportunities for taxi booking applications in the Middle East," said Sam Platis, executive director of MENA Catalysts.
Karim, who claims to have 33 million registered users, was founded by Madthar Sheikha and Magnus Olson before joining them, Abdullah Elias, and Sheikha and Olson worked together at McKinsey.

In 2014, Karim acquired Anwani for delivery services, which Elias co-founded. Investors include German automaker Daimler and Diddy, the largest provider of taxi booking requests in China.
Ober is expanding its global competition in its major taxi applications, operating in 70 countries, including rival Lift.

This will be the second major acquisition of a technology company in the Arab region after Amazon bought the company in 2017. Like Ober, Karim expanded the main taxi booking activity and launched a service delivery service last year. The company also offers digital payment services.
Ober's business includes renting bicycles, scooters, hauling goods and delivering food.

Ober's revenues last year were $ 11.3 billion and total reserves was $ 50 billion. But the company lost $ 3.3 billion, excluding the sale of its overseas units in Russia and Southeast Asia, and Karim does not disclose its financial statements.

Reuters quoted a well-informed source as saying that Ober is working to accelerate the implementation of a large six-month mapping project to fill gaps in coverage of Arab cities before acquiring regional rival Karim and IPO in this year.

The source said that a team of 28 employees, including engineers, working for the outsourcing company Wipro, was about to complete detailed maps of companies and public buildings in Saudi cities and that Ober asked him to speed up his work. In April this project may have helped strengthen the company's position in its negotiations to buy cream.

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