As rumored over the weekend, Uber Technologies Inc. early today announced that it has acquired Middle Eastern ride-hailing startup Careem Networks FZ.

The acquisition came in at $3.1 billion, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. According to Reuters, the notes are convertible into Uber shares at a price equal to $55 apiece, a 13 percent premium on Uber’s on-paper share price as of its last round via SoftBank Group Corp. in November 2017.

Founded in Dubai in 2012, Careem has more than 30 million registered users in 120 cities across North Africa, the Middle East and South Asia.

Although Uber has acquired full ownership of Careem under the deal, the company itself will continue to operate as a separate entity under the leadership of Careem co-founder and current Chief Executive Officer Mudassir Sheikha. Fellow co-founders Magnus Olsson and Abdulla Elyas will also stay on with the company post-acquisition. Sheikha and Olsson will take two seats on Careem’s board and Uber will appoint the three remaining positions.

In a letter to employees, Uber CEO Dara Khosrowshahi said both brands would continue to operate separately.

“After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each,” Khosrowshahi said. “Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.”

Synergies across the two companies do exist. In addition to its core ride-hailing service, Careem also offers delivery services and a digital payment platform.

The acquisition, the largest in Uber’s history, comes ahead of the company’s long-awaited initial public offering in April. With Uber reporting slowing growth in the fourth quarter, the addition of Careem to its business in a market that offers high growth opportunities can only help in its IPO sales pitch.

Coming into the acquisition, Careem had raised nearly $800 million from investors, including Rakuten, Daimler, DCM Ventures and Coatue Management. One Careem investor, the Saudi Public Investment Fund, is also an investor in Uber.

The deal is subject to regulatory approval in various countries and is not expected to close until the first quarter of 2020.

Image: Uber