Uber is close to buying its Middle Eastern ride-hailing rival Careem in what will be the US company’s biggest-ever acquisition.

The two companies are set to announce a $3.1bn deal as early as Tuesday, consolidating Uber’s grip on one of its fastest growing markets ahead of a flotation next month expected to value it at up to $120bn (£91bn).

Dubai-headquartered Careem, which was set up in 2012, has been an acquisition target for Uber for years but has so far escaped the American company’s clutches, raising hundreds of millions of dollars to compete fiercely with its bigger rival.

Careem investors such as the Saudi prince Alwaleed bin Talal are due to sign off on the deal on Monday night, according to Bloomberg.

Uber has agreed mergers with several of its international rivals in an attempt to put an end to brutally-expensive price wars. It has combined its operations in China with the market leader Didi Chuxing, and made similar deals in Southeast Asia with Singapore-based Grab and in Russia with the country’s primary internet giant Yandex.

The deals have marked an attempt to turn around Uber’s heavy losses and allow the company to focus on competition with its key domestic rival Lyft and expansion into new areas such as food delivery and electric bicycles and scooters.