Saudi Arabia: CMA approves Arabian Shield capital increase request

Source: Middle East Insurance Review | Dec 2021

The Capital Market Authority (CMA) has announced the approval of Arabian Shield Insurance Cooperative’s (Arabian Shield) request to increase its capital as part of the merger process with Alahli Takaful (Alahli) through a securities exchange offer.

The capital of Arabian Shield will increase from SAR400m ($107m) to SAR638.52m by issuing 23,852,462 ordinary shares to merge Alahli into its operations. The merger will also lead to transferring all of Alahli’s assets and liabilities to Arabian Shield through a securities exchange offer. The merger remains subject to the approval of the shareholders of both operators, said the CMA statement.

The insurance sector in Saudi Arabia has been witnessing active M&A activity over the past two years. In 2020, three deals took effect including the merger of Walaa Cooperative Insurance with MetLife-ANG-AIG, Gulf Union with Al-Ahlia, and Aljazira Takaful with Solidarity. There remain three other merger operations in the pipeline and are expected to be finalised this year.

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