(Bloomberg) — Uber Technologies Chief Executive Officer Dara Khosrowshahi has cut the largest deal of his tenure, buying Middle Eastern ride-hailing competitor Careem Networks FZ for $3.1 billion.

Uber will pay Dubai-based Careem $1.4 billion in cash and another $1.7 billion in convertible notes when the deal closes, the two companies said in a statement. They are seeking regulatory approval in the 15 countries where Careem operates. Bloomberg had previously reported some details of the deal, which is expected to close in the first quarter of 2020.

The deal comes as San Francisco-based Uber is preparing to file in April for an initial public offering, people familiar with the matter have said. The acquisition isn’t expected to slow down Uber’s IPO process and will allow ride-hailing firm to emphasize its global footprint relative to rival Lyft Inc., which is expected to begin trading Friday.

The acquisition will be Uber’s priciest and will mark the first time the company bought one of its regional competitors. Uber has sold many international business units, including in China, Southeast Asia and Russia, taking stakes in Didi Chuxing Inc., Grab and Yandex NV in the process. Another recent major purchase was electric bike company Jump Bikes.

The Careem acquisition represents one of the largest technology deals in the Middle East, according to data compiled by Bloomberg. As part of the agreement, Careem will continue to operate as a standalone brand even after the deal closes.

Deal details:

Careem will become a wholly-owned subsidiary of Uber Mudassir Sheikha will remain as Careem CEO Careem will have its own board, with three representatives from Uber and two from Careem Both companies’ apps will continue to operate under separate brands Jefferies LLC acted as exclusive financial adviser to Careem on the transaction.

Because the move combines the two largest ride-hailing companies in the Middle East, it could face regulatory scrutiny. One inevitable selling point of the deal will be that it allows the two companies to raise prices, while also reducing pressure to compete with each other in how much they pay drivers.

“Uber was very good at convincing the management team that they can run independently post-acquisition,” said venture capitalist David Chao, an investor in Careem, referring to the Dubai-based firm. “I think terms were good and this was a huge victory for Uber.”

Uber Payout

Some of Careem’s early backers are set to benefit from the deal. Riyadh-based Al Tayyar Travel Group, one of the company’s largest corporate shareholders and earliest investors, said it expects to gain at least 1.78 billion riyals ($470 million), pushing shares up more than 8 percent. Saudi Telecom expects to get about $274 million in cash and stock.

“For investors of Careem, this acquisition is a good deal as they have the minimum guaranteed price of $3.1 billion,” said Meziane Lasfer, Professor of Finance at Cass Business School in Dubai. As part of the acquisition is paid for in Uber shares, Careem investors also have “a large potential upside value” if the shares go higher than the $55 price the deal is based on.