Arabian Shield, Alinma Tokio Marine sign non-binding MoU on potential merger

Insurance logo

Alinma Tokio Marine Co. and Arabian Shield Cooperative Insurance Co. signed, on Dec. 13, a non-binding memorandum of understanding (MoU) on a potential merger, the insurers said in separate statements to Tadawul. 

Both companies will conduct operational, technical, financial, legal, and actuarial due diligence and enter into non-binding talks on the terms and conditions of the potential merger. 

If a binding merger agreement is signed, and the regulatory and shareholders’ approvals are obtained, the proposed merger will take place through a share swap. The surviving entity will issue new shares to the merging entity’s shareholders and assume all the rights and obligations of that entity.

The swap ratio between Alinma Tokio Marine and Arabian Shield will be determined after concluding the necessary due diligence.

The surviving entity will absorb all employees of the merging entity, and there will be no forced layoffs.

The MoU shall terminate in case of the following, whichever is earlier: the execution of the merger agreement; the expiry of the 12-month exclusivity period stated in the MoU; the termination of the MoU in writing by both parties; a written notice is provided by Arabian Shield or Alinma Tokio Marine on terminating the MoU to the other party at any time five months following the MoU execution date.

The binding MoU does not necessarily lead to the merger completion.  

Both companies will continue to announce any material updates on the proposed merger, and will maintain their normal operations until the proposed merger is complete.

For More Mergers and Acquisitions