Al Ahlia, Gulf Union get SAMA nod on potential merger

Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank, has approved the potential merger between Al Ahlia for Cooperative Insurance Co. (Al Ahlia) and Gulf Union Cooperative Insurance Co., Al Ahlia said in a bourse filing. 

On May 10, 2018, the boards of the two companies signed a merger agreement on the terms by which Gulf Union proposes to acquire the entire issued share capital of Al Ahlia.

The planned merger awaits approval from the extraordinary general meetings of either party and other regulatory approvals.

Under the deal, Gulf Union will acquire Al Ahlia’s 100% share capital at an exchange ratio of 1.740351, thereby Gulf Union issues one new share in Gulf Union in exchange for 1.740351 shares of Al Ahlia.

Based on Gulf Union’s closing share price of SAR 15.41 on May 9, 2018 (the last trading day prior to the announcement), the transaction value is approximately SAR 141,672,575 million.

Gulf Union had appointed the Saudi Kuwaiti Finance House as financial advisor and Al-Enezee in association with Holman Fenwick Willan LLP as legal advisor for the deal.