Transport

Qatar vetoes Uber’s $3.1bn Careem deal

March 2, 2023, 2:18 PM

Qatar's competition authority has vetoed Uber's acquisition of Middle Eastern rival Careem

Careem has ceased operations in country
Uber acquired Careem for $3.1bn in 2019
Careem operates in 80 cities in 10 countries

Qatar’s competition authority has vetoed Uber’s $3.1 billion acquisition of Middle East rival Careem, four years after it was announced.

Careem confirmed this week it had ceased operations in the Gulf state from February 28, despite the company expanding its fleet of branded cars to help transport fans to and from football matches during last year’s World Cup.

San Francisco-based Uber Technologies, which bought Careem in 2019 for $3.1 billion, will continue to operate ride-hailing services in Qatar, but the American global giant said legal hurdles meant the deal had not been approved by Qatari authorities.

“Uber sought regulatory clearance from certain local competition authorities (including in Qatar) to acquire Careem in 2019. While regulatory approvals in other countries were obtained, unfortunately, this did not happen in Qatar,” Uber said in a statement to CNBC and Reuters.

As a result of the decision, the Uber deal has not closed in Qatar and Careem has decided to exit the Gulf state.

Careem was founded in 2012 in Dubai and a year later Qatar became its first market outside the UAE.

It currently operates in over 80 cities and 10 countries.

The Qatar government and Careem have declined to comment.

Qatar set up the Competition Protection and Antimonopoly Committee as part of a decree in 2006. Affiliated with the minister of economy and commerce, the committee was set up “to fight monopoly practices” and “aims to promote fair economic competition in the context of transparent markets that enable businesses to compete freely and consumers to benefit from such competition.”

The committee consists of ten members, including a representative from the private sector, two representatives from the Ministry of Economy and Commerce, two experts nominated by the minister of economy and commerce and one representative each from the Energy Ministry, Finance Ministry, Justice Ministry, Qatar Central Bank and General Authority of Customs and Ports.

In a January 2023 article for The Law Reviews, London-based Charbel Abou Charaf, a partner at law firm White & Case, said that under Qatar’s current legislative framework, there are no antitrust or merger control laws applicable to mergers and acquisitions.

“However, an antitrust culture is starting to emerge with the establishment of a De-monopolisation and Competition Protection Committee at the Ministry of Commerce and Industry”.

“It has recently issued notices to large Qatari companies in relation to exclusivity and pricing matters,” Charaf added.