Bahrain National Holding (BNH) has received a binding offer from Solidarity Group Holding for the acquisition of 100% of its wholly-owned insurance subsidiaries, BNH says in a stock exchange statement.
Bahrain National Holding (BNH) received a binding offer on 8 August 2024 for the acquisitions of 100% of its wholly-owned insurance subsidiaries, the company announced in a stock exchange statement.
The subsidiaries are Bahrain National Insurance Company and Bahrain National Life Assurance Company. The purchase price is BHD75m ($199m).
BNH says that its board of directors has accepted the offer and expressed its interest to proceed to the next steps in the process. The deal is subject to regulatory and other relevant approvals.
When the transaction is completed, it is likely to transform the Bahraini insurance landscape because it will catapult the Solidarity Group into becoming a more formidable competitor to the current market leader, Bahrain Kuwait Insurance Co.
The Solidarity offer follows closely on the heels of an acquisition by BNH. In June 2024, BNH disclosed that it had entered into an understanding with Doha-headquartered AlKhaleej Takaful Insurance Co for the acquisition of the latter’s 25% stake in Bahrain National Life. A sale and purchase agreement was concluded subsequently with the deal priced at BHD3m and the asset transfer effected. This acquisition turned the life insurer into a wholly-owned subsidiary of BNH, which already held the remaining 75% equity.
BNH was established in 1998 through a merger between Bahrain Insurance Company and National Insurance Company. The life and non-life insurance operations were restructured and undertaken by Bahrain National Life and Bahrain National Insurance respectively.
Industry consolidation
Last week, Mr Jawad Mohammed, chairman of Bahrain Insurance Association, said that the insurance market in Bahrain needed more mergers or acquisitions between insurance companies. He described the market as “currently crowded with a large number of companies, which leads to chaos in prices and services”. M&As are important to reducing the price war in the insurance industry, he added.
Bahrain has seen several large M&A deals in the past five years. Among them was the Canadian group Fairfax’s acquisition of Kuwait Projects Company Holding’s (KIPCO) 46.32% stake in Gulf Insurance Group (GIG) at the end of 2023. The deal was worth approximately $850m. This followed Solidarity Bahrain’s acquisition of 100% of both Al Hilal Life and Al Hilal Takaful, also during 2023. In 2022, Solidarity Bahrain’s operations were merged with those of the regional takaful company T’azur Insurance in Bahrain.