Al Ahlia-Gulf Union merger to serve shareholders’ interests, officials say

The potential merger between Al Ahlia for Cooperative Insurance Co. and Gulf Union Cooperative Insurance Co. will be in the best interest of both companies’ employees and shareholders, Al Ahlia’s chairman Prince Mohammad Bin Bandar and Gulf Union’s chairman Abdul Aziz Ali Al-Turki have said in separate statements.

“The proposed merger will be positive for both companies, as they will benefit whether on the level of market share or the support expected to be received from the Saudi Arabian Monetary Authority,” they added.

The potential merger will also help cut operating costs and expenses at both insurers, boost their financial position and cash flows, and enhance their operating efficiencies and investments going forward.

The merger terms are based on joint commitment of both companies to reach fair results that may contribute to boosting shareholders’ equity, they said.

The Tadawul-listed insurers signed a non-binding deal to begin the due diligence for a potential merger via a share swap, both firms said in a statement today.