Saudi Arabia: Merger of Gulf Union and Al Ahlia Cooperative Insurance takes shape
Source: Middle East Insurance Review | Dec 2020
Shareholders of Al-Ahlia Insurance approved the company’s merger with Gulf Union Cooperative Insurance during an extraordinary general meeting held in November, the company said in a bourse statement.
Gulf Union will issue 7.95m new ordinary shares at SAR10 ($2.67) par value each, to buy all issued shares of Al-Ahlia at a total par value of SAR79.47m.
Shareholders also approved the merger terms and conditions and authorised Al-Ahlia’s board of directors to take any decision necessary in this regard. They approved increasing Gulf Union’s capital from SAR150m to SAR229.47m.
Previously on 5 October, shareholders of Gulf Union approved the terms and conditions of the merger deal with Al-Ahlia Insurance.
Al-Ahlia signed on 4 June a binding merger agreement with Gulf Union to acquire all its shareholders’ issued shares through a share swap without any cash payment.
The merger will take place through the issue of 0.65 shares in Gulf Union for each share in Al-Ahlia. Upon the merger completion, Al-Ahlia shareholders will own 34.63% of Gulf Union, while Gulf Union shareholders will own 65.37% of the company following the capital hike.
Both insurers received, on 10 August a no-objection letter on their merger deal from the Saudi Arabian Monetary Authority.
The merged entity will operate under the name of Gulf Union Al Ahlia Cooperative Insurance Company. M
SAR1 = $0.27