Al-Ahlia’s CEO says merger with Gulf Union ‘best option’ now, expects cost synergy

Al-Ahlia Insurance Co.’s merger with Gulf Union Cooperative Insurance Co. is deemed as the “sole and best option” at this stage, as it will build a new strong entity that can withstand challenges, compete with peers and realize targets, Al-Ahlia’s CEO Mesheal Al Shayea told Argaam in an exclusive.

“The merger will create cost synergy, and give rise to stronger business operations and financial position,” Al Shayea said.

The merger is a key, strategic decision that aims to achieve the targets of both companies and protect the interest of their shareholders.

“We believe the merger of small caps has become very necessary to face market challenges and enhance competitiveness, which will reflect positively on the services and products offered to customers,” Al Shayea added.

According to Argaam’s data, Gulf Union signed, on June 4, a binding merger agreement with Al-Ahlia to fully acquire the issued shares of Al-Ahlia through a share swap without any cash payment.

The two insurers have also published circulars, offer documents and timetables to complete the merger process after obtaining the required regulatory approvals.