Al Ahlia Insurance Company and Gulf Union Cooperative Insurance Company last month announced signing a Memorandum of Understanding (MoU) to evaluate a potential merger.
Under the non-binding MoU, signed on 24 December 2019, both companies will conduct technical, financial, legal and actuarial due diligence and engage in discussions on the terms and conditions of a potential merger, according to a statement to the Saudi Stock Exchange (Tadawul).
The two companies agree that in case the proposed merger occurs, it will be through the exchange of shares. Gulf Union will issue new shares to Al Ahlia’s shareholders in exchange for all issued shares in the latter.
The MoU would expire on the earlier of the signing of the merger agreement or after a period of nine months from the date of the signing. Moreover, the MoU can be extended or terminated by the mutual consent of both parties.
Both sides have been exploring a merger since at least 2017.
Separately, the Saudi Arabian Monetary Authority (SAMA) has given approval for the merger of MetLife AIG ANB Cooperative Insurance Company with Walaa Cooperative Insurance Company.
Completing the merger is subject to securing the required regulatory approvals, and the approval of the shareholders of each company.
MetLife AIG ANB Cooperative Insurance and Walaa Cooperative Insurance signed a binding merger agreement in September 2019.