UAE: Salama and Takaful Emarat form merger assessment panel
Source: Middle East Insurance Review | Nov 2022
Islamic Arab Insurance (Salama) and Takaful Emarat (TE) have formed an assessment committee to act on the proposed merger of the two Islamic insurers.
The committee has already had one meeting with more scheduled. The merger contract is yet to be signed and the terms of the contract are yet to be agreed upon by Salama and TE as these would follow the completion of the work of the assessment committee, Salama said in a statement on 14 October.
The committee has up to 90 days to submit its findings to the director-general of the UAE Central Bank, which will contain an assessment of the assets, rights and obligations of Salama and TE.
News of the proposed merger between the two companies was first published in the media on 2 October. Salama and TE are to merge by an amalgamation whereby TE will be merged into Salama, the surviving entity and all the assets and liabilities of TE will be merged into Salama.
Salama said, “The merger presents an opportunity to realise business synergies and improve the overall performance of Salama and enhance its capacity to capture a larger market share.”
The combined asset base of the merged entity is expected to meet all applicable solvency requirements.
The merger would diversify the distribution space of Salama, widen its distribution channels and help it gain access to more customer segments. A larger customer base is expected to allow Salama to extend coverage in terms of network and service providers. The takaful operator is already the largest Islamic insurer in the UAE at present.
The value of the transaction is still subject to the finalisation of the terms of the merger between the two parties. In the cashless merger deal, existing shareholders of TE shall be issued new shares in Salama upon the merger becoming effective.
The merger agreement is expected to be signed during the fourth quarter of 2022 (subject to regulatory approvals). Due to a six-to-12-month execution period, the closing of the deal is expected to occur in the second half of 2023. M