Enaya Cooperative Insurance Company (Enaya) has emphasised the importance of its proposed merger with Salama Cooperative Insurance Company (Salama) in an invitation to shareholders to attend an extraordinary general meeting on 4 January 2026 to vote on the merger.
In a statement lodged with the Saudi Exchange (Tadawul), Saudi stressed that this merger is pursued for the purpose of rectifying Enaya’s regulatory status and avoiding the challenges that it might face in the event that the merger with Salama is not completed.
The merger deal is proposed to be concluded through the issuance of 18,894,000 new shares in Salama and the dissolution of Enaya as a result. All assets and liabilities of Enaya will be transferred to Salama upon completion of the merger. The terms are set out in the merger agreement, dated 14 August 2025, between Enaya and Salama.
Failure to complete the merger, the Enaya statement said, would result in the continued non-compliance with the minimum statutory capital requirements for insurance companies, which stipulates that “the paid-up capital shall not be less than SAR300m ($80m)”.
Enaya warned that in the event of continued non-compliance with the law, the company may be subject to severe measures that may not be remediable in the future. “This necessitates that shareholders fully appreciate the seriousness of this matter and the importance of cooperating in taking a decision that serves the best interest of the company, particularly in light of the challenges facing the insurance sector in general and the strict requirements related to compliance with minimum capital requirements in particular.”
Third merger attempt
Enaya added that its board of directors has endeavoured to propose several options to meet the statutory requirements, which included two previous merger proposals and one capital increase recommendation, as follows:
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First option: merger with Amana Cooperative Insurance Company, which was rejected by shareholders at the extraordinary general assembly held on 9 January 2022.
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Second option: merger with United Cooperative Assurance Company, which shareholders also rejected at the extraordinary general assembly held on 5 December 2023.
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Third option: A recommendation to increase Enaya’s capital to comply with the minimum statutory capital requirements and to strengthen its financial solvency. This recommendation was rejected by shareholders at the extraordinary general assembly held on 28 November 2024.
The statement added, “Accordingly, and in line with the Board of Directors’ responsibilities toward the Company, and its full commitment to safeguarding its interests and avoiding exposure to any future risks or damages, the Board hopes that shareholders will assume their role and demonstrate a sense of responsibility by giving due consideration to the Board’s recommendation to merge with Salama, particularly in light of the strategic benefits resulting from the merger, which include enhancing financial solvency and capacity, reducing costs, improving operational efficiency, complying with regulatory requirements, benefiting from incentive exemptions from statutory fees, diversifying products and services, and increasing market share.”