Sale of stake in Careem app brings e& $100m

UAE telecommunications company e& has agreed to sell a 12.5 percent stake in Dubai-based Careem Technologies, the parent of a regional “super app”, to US ride-hailing company Uber.

The telco will generate $100 million in cash from the stake divestment, but will retain a 37.53 percent stake in Careem Technologies, it said in a statement to the Abu Dhabi Securities Exchange (ADX) on Monday.

Careem Technologies’ gross transaction value in core services is up almost five times, driven by strong performance across several segments, including Food (food delivery), Quik (grocery delivery), Plus (fintech services) and Pay (subscription services).

“Our partial stake sale to Uber will allow Careem Technologies to benefit from Uber’s global technology experience and position itself for the next phase of growth,” the statement said.

The move will support e&’s increased focus on its core businesses and back capital allocation priorities.

In addition, e& and Uber have the right to sell and acquire the remaining stake in Careem Technologies between December 1, 2031 and January 31, 2032.

The transaction is subject to regulatory approvals.

In April 2023, e& invested $400 million to become a majority shareholder in Careem’s app.

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Careem, launched in 2012 as a ride-hailing app, was acquired by Uber for $3.1 billion in January 2020. The app will continue to be managed by founders Mudassir Sheikha and Magnus Olsson.

Shares in e& closed 2.4 percent lower at AED18.04 on May 25, down nearly 2 percent year-to-date.

The Emirates Investment Authority owns 60 percent of the telecom operator.