Gulf Union, Al Ahlia extend MoU for potential merger

Gulf Union Cooperative Insurance Co. and Al Ahlia for Cooperative Insurance have extended for another 20 weeks their non-binding memorandum of understanding (MoU) for a potential merger, signed in June.

Both insurers agreed on June 21 to start due diligence for a potential merger.

The companies had agreed that the merger would be closed via a share swap deal, under which Al Ahlia would become a subsidiary of Gulf Union.

Gulf Union will issue 9 million new shares to Al Ahlia shareholders, in exchange for all issued shares in that company.

Accordingly, total issued shares of the merged entity will stand at 24 million, with SAR 240 million in capital.

The due diligence process for the deal is expected to be finalized in H1 2018.

Gulf Union had earlier appointed Saudi Kuwait Finance House and Al-Enezee in association with Holman Fenwick Willan as its financial and legal advisors respectively for the merger.