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Global ride-hailing giant Uber has joined forces with its Middle East competitor Careem and bought it for $1.3 billion.

On Tuesday, the two companies announced their merge in a joint statement which read “Careem and Uber are joining forces. We have reached an agreement in which Uber will acquire Career for $3.1 billion.”

Careem is to become a subsidiary of Uber, owned by Uber, but will continue to function separately. Careem intends to retain its services, branding and app.

The deal states that Uber will pay $1.4 billion in cash and the remaining $1.7 billion in convertible notes.

The statement read: “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.”

Uber Chief Executive Dara Khosrowshahi stated that it is an “important moment” for Uber as it continues to strengthen its business on a global scale.

“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organization that inspires,” said Careem Chief Executive and Co-Founder Mudassir Sheikha.

The deal is subject to approval from regulatory bodies and it is expected to become approved at the beginning of 2020.

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