Two insurers have signed a non-binding memorandum of understanding to explore a potential merger between them, according to separate announcements made by the companies yesterday.
The merger of Buruj Cooperative Insurance and the Mediterranean and Gulf Insurance and Reinsurance (MedGulf), would be through a share exchange offer, according to statements lodged with Tadawul.
MedGulf will act as the acquiring company, while Buruj will be the acquired firm. The deal will involve increasing MedGulf’s capital and issuing new shares to Buruj shareholders based on a swap ratio to be agreed upon by both parties.
Following the signing of the MoU, both insurance companies will conduct financial, tax, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the proposed transaction.
The completion of the proposed transaction is subject to a number of regulatory approvals, including the approval of the Insurance Authority, the Capital Market Authority, the Saudi Exchange and the General Authority for Competition, and the approval of the extraordinary general assemblies of the shareholders of MedGulf and Buruj.
The potential transaction is also subject to the two companies agreeing on a final binding agreement.