CMA approves Walaa Insurance’s capital increase for merger with SABB Takaful

Logos of Walaa Insurance and SABB Takaful

The Capital Market Authority approved the request from Walaa Cooperative Insurance Co. to increase its capital from SAR 646.39 million to SAR 850.58 million by issuing 20.42 million ordinary shares.

The capital increase is to merge SABB Takaful into Walaa Insurance and transfer all of SABB Takaful's assets and liabilities to Walaa through a share swap transaction.

Walaa’s capital increase shareholder circular will be published within sufficient time before the extraordinary general assembly meeting (EGM). The shareholder circular must include all relevant information that the shareholders need to know before making an informed decision when voting on the capital increase for the purpose described, including the capital top up and risk factors.

CMA's resolution included the approval of the proposed offer timetable, as well as the publication of the offer document by Walaa Insurance to SABB Takaful shareholders.

The offer document of Walaa Insurance will be published for SABB Takaful shareholders within sufficient time before SABB Takaful’s EGM.

If Walaa Insurance shareholders approve the capital increase and shareholders of SABB Takaful accept the offer in their respective EGMs, the new shares will be issued to SABB Takaful shareholders registered with the Securities Depository Center (Edaa) register. Accordingly, shares of SABB Takaful will be delisted from the Saudi Exchange after the merger decision becomes effective.

A voting decision without reading the shareholders circular and the offer document carefully reviewing its content may involve high risks. Therefore, the shareholder should carefully read the shareholders circular and the offer document to be able to reach a proper voting decision. If the shareholders circular and offer document prove difficult to understand, it is recommended to consult with an authorized financial advisor, CMA stated.

CMA's approval should never be considered as an endorsement of the merger's feasibility. The CMA's approval of the application merely means that the legal requirements as per the Capital Market Law and its implementing regulations have been met.

Walaa Cooperative Insurance signed a binding merger agreement with SABB Takaful on Feb. 24, reflecting the agreement of both companies to merge through a share swap transaction, whereby Walaa will issue 0.6 nominal shares against each issued share in SABB Takaful for the benefit of eligible shareholders.

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