Halal fishing .. How did Karim succeeded in making Ober swallow the taste?

As expected over the course of almost a year, and with many rounds of negotiations between them in mid-2018, has finally officially announced the completion of the acquisition of "Ober" global transport services partnership to rival regional Karim, "which is based in Dubai, a center of 3.1 Which is the biggest deal in the region, surpassing Amazon's acquisition of Com.

Bloomberg reported the acquisition before it was officially announced through Ober that the deal included direct payment of $ 1.4 billion in cash, while the rest of the $ 1.7 billion would be in the form of buying bonds in the company "Ober" liquidizable, bringing the total deal 3.1 billion To be completed in the first quarter of 2020, so that Ober can achieve one of its most important regional ambitions to expand in the Middle East with full acquisition of its traditional competitor.

The acquisition comes as an excellent "milestone" for Ober at a crucial time. Acquiring a strong competitor in the region will earn investors and shareholders more confidence a few weeks before the IPO IPO in April this year. With initial estimates of the company's value of $ 120 billion, making it one of the largest public offerings in the stock exchange in recent years. (1, 2, 3)

Let's look at the squatters in the square

If we look at Ober executives as the world's leading partner in participatory transport and start looking for the fierce tigers that have emerged over the past 10 years to compete for their spoils in this world, Ober's main competitors globally They revolve in several specific names.

The US company, " Lyft, " founded in San Francisco in 2013, has a total investment of about $ 5 billion, which has raised to about $ 15 billion, accounting for 28% of the US market, which has expanded to serve in Canada also To expand its activities in the North American continent and become the first competitor of Ober in that region. (4)

Didi , the Chinese company established in 2012, is the largest company in the field of participatory transport in China, with an estimated value of $ 56 billion and more than 30 million deliveries a day. The company serves in more than 400 cities in China and dominates the Chinese market almost completely. (5, 6, 7)

South Asia's Grab is one of Ober's most important competitors in the region. Founded in 2012, it has achieved significant growth raising its value to $ 6 billion. The company, " Ola " Hindi, which was founded in 2010 in the city of Bombay has become the operator of the main transport activities in India with a total value of $ 5.7 billion. (8, 9)

In the Middle East and North Africa, and coinciding with the founding of the Ober competition earlier this decade, Karim was making its way into the club and becoming the main competitor of Ober in the region.

Cream .. the rise of epic to face the adults

Since Mdather Sheikha and Magnus Olsen have agreed to launch an emerging company in 2011 in Dubai - their place of residence - and after a quick journey on the most important ideas, both chose to make cab bookings. The start was very modest, starting as a car rental company in Dubai in March 2012, which became Careem Transport Partnership in early 2013 with the launch of the iOS application.

In 2013, the newly-funded, self-financed, half-million-dollar project, which saw an expansion in the Gulf, began to operate in Doha and Riyadh, receiving initial funding of $ 1.7 million, followed by another $ 10 million financing and expansion outside the Gulf. Beirut and Cairo in 2014.

By the year 2015, Kareem is taking over the emerging company "Anwani". Its founder and CEO, Abdullah Elias, joins Kareem as a co-founder. The company is launching another expansion campaign in Lahore, Morocco and Casablanca, In November 2015 to become the fastest growing company in the Middle East this year.

The year 2016 was the year of major breakthroughs in the company's fast-growing life. It launched a major service package in all areas of operation, such as the Special Needs Transport Service in Saudi Arabia, the Cairo River Taxi Service, And the launch of its R & D center in Germany and other services that have made the company reach the title of Unicorn this year, Worth more than a billion dollars.

The success of Karim continued as a major competitor to Ober in the Middle East, where it continued to receive huge investment rounds estimated at approximately $ 770 million from approximately 20 risk investors, its activity in more than 100 cities in 14 countries, Its cars to a million "captain" car in various cities and tens of millions of users, the market value has risen to more than two billion dollars.

It was natural that this rapid growth of Karim in the Middle East and the major regional countries surrounding it would have made Ober, the world's largest participatory transport company, beginning to take the usual simple step taken by "adults" "When they find a competitor soaring in front of them, causing them exhaustion: the step of acquisition, and annexation to his kingdom . (10, 11, 12, 13)

We will be the winning player in those markets .. We will hold and will not sell this time

"In India, the Middle East, Africa and others, we will be - I think - the winning player in these markets, and we will control our fate"

The statement by Dara Khososhahi, chief executive of Ober at the end of May 2018, was a key phrase that shaped Ober's expansionist tendencies over the following months. It recently acquired a fierce competitor after it had "sold" Commercial activities of its competitors, in exchange for a share of their companies.

The statement came weeks after Ober, a South Asian company, sold its business to its emerging rival, " Grab ", which is the main operator of the joint venture in the region, in exchange for 27.5% of the company's stake.

"The exit from the South Asian market, which includes Malaysia, Indonesia, the Philippines, Thailand, Singapore and Vietnam, is not a losing step, but a step in the right direction," said Khosrohahi, aspiring CEO of Ober. The company said in a statement that the company's stake in the company was $ 700 million in its operating activities in the region. Is worth $ 1.65 billion, which is an excellent return that is twice as much as Ober has already invested in the region. (14, 15)

Ober previously sold its activities in China to its competitor Didi chuxing in August 2016, in return for 17.5 percent of the Chinese company. It also made a similar move in Russia when it sold its activities to Yandex in a merger deal covering 36.6% of the nascent company Yandex Taxi, which controls the joint transport activity in Russia and its neighboring countries. 6 billion dollars. (16, 17, 18)

Oper has begun to focus its attention on other emerging markets, notably the Middle East, India and Africa. The company began its first negotiations with Careem in July 2018, several weeks after the company's expansion strategy New ones in these emerging regions of the world, to ensure more control over these markets and stabilize them in the face of their big competitors.

The right deal is at the right time

Another focus is on why Ober has accelerated the acquisition of its first competitor in the Middle East, a focus on Opber's poor numbers in recent months. It is true that it is the largest company in the world operating for the transport of participatory and the initial estimate of $ 120 billion, which exceeds any competitor, but this does not exclude the entry into the bleeding losses during the past years.

In 2017, Ober's total losses amounted to about $ 4 billion. In the fourth quarter of 2018, Ober recorded a loss of $ 1 billion with a sharp decline in bookings, which raised question marks strongly, especially with the need to increase profits in any way, so that it can put its shares for public subscription During the year 2019.

Therefore, it was natural for Ober to end the acquisition of Karim, its main competitor in the Middle East, in a big deal, just a few weeks before the start of the IPO, which will certainly increase shareholders confidence in the giant company that was shaken through The latter period in some way with the achievement of significant losses. (19, 20, 21)

Monopoly concerns

On the other hand, some concerns are on the horizon in some countries after the announcement of the acquisition of "ObR" on the "cream" completely; which means a direct monopoly of the intelligent transport service in the absence of any other competitor providing the service, whether a competitor local or foreign Works within the state.

Egypt was one of the first countries to announce these concerns after the deal was concluded. Kareem is the main competitor of Ober in the Egyptian smart transport market, which has made the competition protection and monopoly monopoly authority issuing an official statement that it is following And announces that it is considering a set of binding measures to avoid any damage to the Egyptian market, and the development of any standards that regulate price levels or any monopoly practices of this sector.

At the end of 2018, the competition protection authority in Egypt announced that it would sign a fine of 28 million dollars (about 500 million pounds) if they agreed to merge or acquire without its consent. But Egypt's Ober Misr said it would "hold discussions" with the Egyptian government on the takeover until it is completed in 2020.

The concerns are not limited to official bodies only, but extends to dealers with both companies, as the monopoly of one company to the market may make it impose conditions on everyone, whether drivers or passengers, especially as many of the drivers were relying on the presence of a strong competitor at the other end Improved performance, service and driver quality, which is no longer in place after the acquisition of Karim from Ober, even if Kareem continues to retain its own brand and retain its brand. (22, 23, 24, 25)

In the end, with the conclusion of the Ober acquisition of Karim that everyone has been expecting for nearly a year, the picture is still vague about the "post-acquisition" phase of operational policies and their impact on markets that were "cream" Careem plays the role of a strong opponent in front of Ober until the game is different and now owned.