Ride-hailing service Uber is expanding in the Middle East, acquiring rival firm Careem.

It will acquire Dubai-based Careem for US$3.1bn (€2.75bn), which will be a wholly-owned subsidiary of Uber.

Careem will continue to operate independently with its own brand and services - retaining its name, app and branding.

Established in July 2012, Careem operates in 120 cities across 15 countries.

Its service areas include major markets such as Egypt, Jordan, Pakistan, Saudi Arabia and the United Arab Emirates.

The transaction is expected to close in the first quarter of 2020 - but is subject to regulatory approval in various countries.

Uber CEO Dara Khosrowshahi said: "This is an important moment for Uber as we continue to expand the strength of our platform around the world.

"With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region.

"Working closely with Careem's founders, I'm confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world".

Uber has over 16,000 employees and operates in 65 countries and more than 600 cities worldwide, including Dublin.

However, it has faced some obstacles in Ireland.

An application for it to run a pilot ride sharing scheme in Limerick was turned down by the Government in 2017.

Headquartered in California, it has offices in New York City, Chicago, Washington DC Seattle and Los Angeles - as well as London and Amsterdam.