File Photo: An Uber Bus in Egypt (Photo: Reuters)
Egypt's Competition Authority (ECA) has approved US-based ride hailing company Uber's pending acquisition of Middle East rival Careem after a months-long conflict over the merger deal with the authority, a statement by the authority said.
Last March, a $3.1 billion deal was sealed for Uber to acquire Careem after more than nine months of negotiations between the two companies, which have been seeing overseas expansions.
The ECA said in a statement that the two companies must abide by a number of “obligations and controls” before the deal proceeds.
The decision comes months after the authority had rejected the merger deal on the grounds that the two companies had not received prior permission from the authority.
The controls imposed by the ECA aim at "ensuring competitiveness, protecting the rights of passengers, drivers, and small- and medium-sized enterprise owners, and boosting expansion opportunities for current and potential investors," the authority said.
The controls include setting a maximum cap for fares, setting a maximum limit for surge periods, and setting a maximum cap for service fees from drivers that does not exceed the current 22.5 percent for the Uber X service and 25.5 percent for Careem-Go rides.
The ECA said that among the controls are Uber not tying its services with Careem in an exclusionary way, and the US company not introducing predatory pricing to ensure market growth and the survival of competitor companies.
The authority said it would appoint monitoring trustees to ensure Uber's compliance with the new controls, which will be in force for a total of five years. Any violation would result in the deal being voided.
In an emailed statement to Ahram Online, Uber said that the transaction is expected to close in early 2020 after the ECA’s approval.
“We welcome the decision by the Egyptian Competition Authority to approve Uber's pending acquisition of Careem. Uber and Careem joining forces will deliver exceptional outcomes for riders, drivers, and cities across Egypt,” an Uber spokesperson said.