Saudi Arabia: Gulf Union-Al Ahlia merger talks are in early stage

Source: Middle East Insurance Review | May 2017

Gulf Union Cooperative Insurance and Al Ahlia for Cooperative Insurance are engaged in a preliminary stage of talks for a merger.

The merger, if successful, will create a strong entity that will increase benefits for shareholders, policyholders and employees of both companies, the company’s Chief Executive, Mr Munir Al-Borno, told Argaam in a telephone interview.

The potential merger will help both insurers reduce costs and focus their efforts.

“Talks are still in early stages, and other issues about general assemblies, shareholders’ equity and both firms’ valuations will be discussed later on,” Mr Al-Borno said.

In early March, the insurers which are both listed on Tadawul decided to start initial talks for a merger. Gulf Union had announced this in a statement.

The proposed merger will depend on approvals by regulatory authorities and shareholders of both insurers.

Mergers are being encouraged in the insurance sector by the Saudi Arabian Monetary Authority, which is the kingdom’s central bank and insurance market regulator. The Saudi insurance market is highly fragmented with 35 insurance companies operating in it. M

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