Saudi Arabia: Gulf Union to take over Al-Ahlia
Source: Middle East Insurance Review | Jul 2020
Gulf Union Cooperative Insurance recently signed a binding merger agreement with Al-Ahlia for Cooperative Insurance to acquire all issued shares in Al-Ahlia through a share swap without any cash payment.
Gulf Union will increase its capital through issuing new ordinary shares to Al-Ahlia shareholders, the former said in a bourse statement. Gulf Union will raise its capital from SAR150m ($40m) to SAR229.47m. The number of shares will be increased from 15m to 22.947m.
Upon the completion of the merger, Al-Ahlia shareholders will own 34.63% of Gulf Union, while existing Gulf Union shareholders will own 65.37% of the company.
The merger is subject to regulatory approvals and the approval of shareholders of both insurers, as well as the expiry of the creditor objection period, Al-Ahlia said.
Al-Ahlia CEO Mesheal AlShayea said the merger with Gulf Union would create an integrated competitive entity, on the geographical and technical levels, as well as in terms of products and human resources.
He added that the merger will boost solvency margins, competitiveness, and the company’s ability to retain existing clients and attract new ones, according to a report by Argaam.
He also said the company plans to invest in technology, expand locally and introduce new products such as general insurance and savings plans. The merged company will also look at fostering strategic partnerships. M
SAR1 = $0.27