Ride hailing giant Uber has reached a deal to acquire Dubai-based rival Careem for $3.1 billion.

The deal consists of $1.7 billion in convertible notes and $1.4 billion in cash and is subject to applicable regulatory approvals.

Uber said it expected the transaction to close early next year.

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.

Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand.

Careem co-founder and chief executive, Mudassir Sheikha, will lead the Careem business, which will report to its own board made up of three representatives from Uber and two representatives from Careem.

Careem and Uber will operate their respective regional services and independent brands.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world.

“With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful start-ups in the region.

“Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world,” said Uber chief executive, Dara Khosrowshahi.

Uber hopes the deal will speed up the delivery of digital services to people in the Middle East through the development of a consumer-facing super-app that offers services such as Careem’s digital payment platform (Careem Pay) and last-mile delivery (Careem NOW).

“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires.

“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.

“We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity.

“This is a milestone moment for us and the region, and will serve as a catalyst for the region’s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors,” said Sheikha.

Jefferies LLC acted as exclusive financial advisor to Careem on the transaction.