Al-Ahlia, Gulf Union merger takes effect as creditor objection period ends

Gulf Union Cooperative Insurance Co. and Al-Ahlia Insurance Co. announced the effectiveness of the merger resolution, pursuant to which all assets and liabilities of Al-Ahlia will be transferred to Gulf Union by issuing new shares with no outstanding unsatisfied creditor objections.

Both the companies said in a separate bourse statements that the insurers have satisfied the merger conditions agreed between the two companies in the agreement, the shareholder circular, and the offer document issued by Gulf Union with respect to the merger.

As a result of the merger deal, all the shares of Al-Ahlia will be canceled, and Gulf Union will implement this by increasing its capital, and issuing 7.95 million ordinary shares, with a par value of SAR 10 per share, in favor of the shareholders of Al-Ahlia, registered with the Securities Depository Center (Edaa) at the end of the trading period on Dec. 3, 2020.

As set out in the key dates and milestones timeline in the shareholder circular and offer document, the cancelation of listing of Al-Ahlia shares on Tadawul, listing of the consideration shares, and deposit of the same in the accounts of the eligible shareholders will be completed within a period not exceeding six days after the announcement.

The required procedures related to the amendment of Gulf Union commercial registration certificate, Saudi Arabian General Investment Authority (SAGIA) license, and the cancellation of Al-Ahlia commercial registration certificate and SAGIA license, will be completed within the timeframe set out in the key dates and milestones timeline in the shareholder circular and offer document.

In case the exchange ratio calculation produces a fractional share, the resulting figure will be rounded down to the nearest share.

Gulf Union will aggregate all fractional entitlements and sell, based on the shares market price at the time, its corresponding shares on behalf of all Al-Ahlia shareholders, who would otherwise have been entitled to receive a fractional Gulf Union share in the market for cash, and subsequently distribute the net cash proceeds to such shareholders proportionate to their respective fractional entitlements within a period not exceeding 30 days from merger completion, as defined in the shareholder circular and offer document).

Any expenses in relation to the sale of fractional shares, will be paid from the proceeds of the sale.

The Saudi Stock Exchange (Tadawul) suspended trading on shares of Al-Ahlia Insurance Co. as of today, Dec. 6, ahead of stock delisting procedures, the bourse said.

Furthermore, the Securities Depository Center (Edaa) will announce the implementation of the quantity increase of Gulf Union’s shares and the deposit of the new shares in the center’s accounts of all eligible Al-Ahlia shareholders after two business days from the effective date of the merger and up to six business days as per regulatory procedures.

According to data compiled by Argaam, shareholders of Gulf Union, during the extraordinary general meeting (EGM) held on Oct. 5, 2020, approved to increase its capital from SAR 150 million to SAR 229.47 million by issuing 7.95 million ordinary shares to merge with Al-Ahlia.

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