Gulf Union AlAhlia, Al Sagr sign binding merger agreement

Logos of Gulf Union AlAhlia Cooperative Insurance Co. and Al Sagr Cooperative Insurance Co.

Gulf Union AlAhlia Cooperative Insurance Co. signed on March 22 a binding merger agreement with and Al Sagr Cooperative Insurance Co., the insurers said in separate statements to Tadawul.

Both companies will merge through a share swap deal, whereby Gulf Union AlAhlia will issue 1.152 nominal shares against each issued share in Al Sagr for the benefit of eligible shareholders on the effective date of the deal.

The agreement was signed in application of the Companies Law, the regulations of the Capital Market Authority (CMA), including the Mergers and Acquisitions Regulations, the Rules on the Offer of Securities and Continuing Obligations, the Listing Rules, as well as the relevant regulations of the Saudi Central Bank (SAMA).

Upon the merger completion, the rights, liabilities, assets and contracts of Al Sagr shall be transferred to the merging entity, which will become the legal successor of Al Sagr.

If the merger deal is approved by all competent authorities, as well as the extraordinary general meetings (EGMs) of both companies, and after the expiration of the creditors’ objection period which is the first fifteen (15) days of the thirty (30) day period -at a minimum- prior to the EGM date, or the date on which all creditors’ objections to the merger are settled (as applicable), Gulf Union AlAhlia will increase its share capital by issuing 16.12 million new ordinary shares at a nominal value of SAR 10 to Al Sagr eligible shareholders based on the swap ratio.

Accordingly, Gulf Union AlAhlia’s capital will reach SAR 620.19 million, divided into 62.019 million ordinary shares, of which Al Sagr shareholders will own 16.12 milliom, or 26% of the post-increase capital. The new shares shall be issued to the eligible shareholders in Al Sagr, and Al Sagr shares will be delisted.

The two insurance services providers will duly announce any relevant updates on the merger. They will continue normal operations until the deal is closed.

In September 2022, Gulf Union AlAhlia and Al Sagr signed a non-binding MoU to evaluate the feasibility of a merger, Argaam reported.