Riyadh – Mubasher: Al Ahlia Insurance Company and Gulf Union Cooperative Insurance Company have announced signing a Memorandum of Understanding (MoU) to evaluate a potential merger.

Under the non-binding MoU, both companies will conduct technical, financial, legal and actuarial due diligence and engage in discussions on the terms and conditions of the potential merger, according to a statement to the Saudi Stock Exchange (Tadawul).

The two companies agreed that in case the proposed merger occurs, it will be through exchanging shares, as Gulf Union will issue new shares to Al Ahlia’s shareholders in exchange for all issued shares in the latter.

The MoU would expire on the earlier of the signing of the merger agreement or after a period of nine months from the date of the signing, 24 December 2019.

Moreover, the MOU can be extended or terminated by the mutual consent of both parties.

Al Ahlia Insurance has appointed Aljazira Capital as its financial advisor for the proposed merger. On the other hand, Gulf Union chose Saudi Kuwaiti Finance House (SKFH) as its financial advisor for the potential deal.