Aljazira Takaful CEO says merger with Solidarity to create one of top 5 insurers in Saudi Arabia

Managing Director and CEO Sager Nadershah

Aljazira Takaful Taawuni Co.’s planned merger with Solidarity Saudi Takaful Co. will create one of the five largest insurance entities in the Kingdom within the next five years, managing director and CEO Sager Nadershah told Argaam in a telephone interview.

Almost 18 months ago, Aljazira Takaful’s board of directors worked on evaluating the investment opportunities available in the Saudi market, targeting expansion in other insurance segments.

Acquisitions, obtaining licenses, laying out policies and measures, developing new cadres were among the options, Nadershah said, adding: “Solidarity Takaful was our choice after evaluating companies.”

The board of directors of Aljazira Takaful and Solidarity formed a joint committee to make recommendations on the merger, Nadershah said, noting that the move helped prepare and organize the post-merger business activities, with the support of the Saudi Central Bank (SAMA).

For the share swap, Nadershah said: “Shareholders must think about the company’s future, rather than today’s prices. Aljazira Takaful generated periodical returns for its shareholders, which, if compared to Solidarity’s performance in the last three years, will prove that the value at present lies in growing shareholders’ capital through generating returns.”

The valuation was “very fair”, as it was based on the adjusted equity book value per share for both companies, Nadershah underlined, adding: “We noticed how the COVID-19 pandemic has weighed on Solidarity’s performance in the first nine months of 2020, when the company incurred losses, compared to Aljazira Takaful, which reported positive performance.”

“The valuation was conducted in 2019, before the pandemic, without taking into account the 2020 financial results of Solidarity,” he added.

Aljazira Takaful maintained its leadership in the protection and savings segment over the last years with a 25% market share, the CEO explained, expecting the company to continue offering various products, and pursue expansions in the motor and health industries.

Aljazira Takaful shareholders approved the merger with Solidarity through capital increase at the extraordinary general meeting (EGM) held on Jan. 26, 2021, Argaam reported.

The creditors’ objection period related to the merger deal between Solidarity and Aljazira Takaful started on Jan. 28 and will run through Feb. 26, 2021.

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