Gulf Union, Al-Ahlia Insurance ink binding merger deal

Gulf Union Cooperative Insurance Co. signed, on June 4, a binding merger agreement with Al-Ahlia Insurance Co. to acquire all its shareholders’ issued shares through share swap without any cash payment.  

Gulf Union will increase its capital through issuing new ordinary shares to Al-Ahlia shareholders, the insurer said in a bourse statement on Sunday.

Accordingly, if the merger deal is approved by the competent government authorities and extraordinary general meetings (EGM) of both companies, Gulf Union will issue 7.947 million new ordinary shares at SAR 10 par value each, to buy all issued shares of Al-Ahlia at a total par value of SAR 79.47 million.  .

Gulf Union will issue 0.646 shares for every share in Al-Ahlia.

Gulf Union will raise its capital from SAR 150 million to SAR 229.47 million. The number of shares will be increased from 15 million to SAR 22.947 million.

Upon the merger completion, Al-Ahlia shareholders will own 34.63% of Gulf Union, while Gulf Union shareholders will own 65.37% of the company following the capital hike.

In a separate statement, Al-Ahlia said its assets and liabilities will be transferred to Gulf Union when the merger is finalized.

The merger is subject to regulatory approvals and EGM approvals of both insurers, as well as the expiry of the creditor objection period, Al-Ahlia added, noting that any further developments will be announced in due course. 

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