Gulf Union offers Al Ahlia shares in a swap deal agreement

Gulf Union Cooperative Insurance Co. today has offered one share for 1.74 shares of Ahlia for Cooperative Insurance Co. under a swap deal agreement for the planned merger between both entities, the company said in a bourse filing.

The boards of both insurers had signed the merger agreement on May 10, under which Gulf Union will acquire the entire share capital of Al Ahlia, by issuing nine million new shares to Al Ahlia’s shareholders.

The potential merger was endorsed by the Saudi Arabian Monetary Authority (SAMA), which oversees the Kingdom’s insurance sector.

Gulf Union’s extraordinary general meeting on Jan. 6, 2019 will discuss the capital increase to SAR 241.94 million from SAR 150 million by issuing 9.194 million ordinary shares to acquire all the shares of Al Ahlia through a share swap deal.

Al Ahlia’s shares will be delisted on March 3, 2019, upon the approval of both companies on the planned merger.

Terms of planned merger
Gulf Union’s capital	SAR 150 mln (15 million shares)
Al Ahlia’s Capital	SAR 160 mln (16 million shares)
Gulf Union’s book value as on Dec. 31, 2016	SAR 146.6 million
Al Ahlia’s book value on FY	SAR 104.4 million
Gulf Union’s new entity stake	62.5%
Al Ahlia’s new entity stake	37.5%
Issued shares for Al Ahlia
Issued shares	9.19 million ordinary shares
Share swap percentage	0.57-for-1.74
Merger Terms	The planned merger is subject to amendments, based on the due-diligence
Gulf Union’s post-merger board structure	The board will comprise nine members; six to be named by Gulf Union and three by Al Ahlia. Abdul Aziz Ali Al-Turki will the chairman of the board.

Gulf Union’s Ownership Structure
Owner	Pre-merger Ownership	Post-merger ownership
Gulf Union Insurance and Projects Management Holdings	%23.24	%14.41
Gulf Union’s board members	%1.57	%0.97
Gulf Union’s shareholders	%75.19	%46.62
Al Ahlia’s shareholders	--	%38.00
Total	%100	100%

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