American ride-hailing company Uber is set to announce a deal worth $3.1 billion to acquire its Dubai-based rival Careem, people familiar with the matter said.

The company is expected to pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem. Reports suggest that these convertible notes will be priced equal to $55 per share. Influential businesses personalities and companies such as Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc which backs Careem have been asked to agree to the terms of the transaction by March 25 after which a deal could be announced as soon as Tuesday, the people said.

Careem Taxi Dubai

Last year, Careem partnered with Dubai RTA for e-Hail Taxi service in a bid to boost the taxi sector.

The acquisition comes ahead of the Uber’s imminent public offering which is predicted to be one of the New York Stock Exchange’s biggest-ever listings. In the same breath, the company is expected to publicly file for an IPO in April that could value it at as much as $120 billion.

In its 2016 round of funding, Careem was valued at about $1 billion, making it one of the most valuable startups in the Middle East. The company now operates with over a million drivers in more than 90 cities in 15 countries.

Uber Taxi Dubai

Sources suggest that Uber will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem.

Following an announcement last year, Careem also partnered with the Dubai RTA for e-Hail Taxi service in a bid to boost the taxi sector. The company was finalized from five e-Hail taxi firms that operate globally following the submission of technical and financial proposals. The new joint venture will see 10,843 taxis exclusively run for a limited period.

The acquisition signals at Uber’s commitment to the Middle East, where Saudi Arabian sovereign wealth fund – one of its biggest investors is based. The acquisition can also be seen as a departure in strategy for Uber which has used such costly deals to offload overseas operations in exchange for stakes in competitors in the past.