Arabian Shield Cooperative Insurance Co. announces signing a Memorandum of Understanding with Alinma Tokio Marine Co to evaluate a potential merger between the two companies
| Element List | Explanation |
|---|---|
| Introduction | Arabian Shield Cooperative Insurance Company (the “Company”) announces the signing of a non-binding Memorandum of Understanding (the “MOU”) with Alinma Tokio Marine Insurance Company on 19 Jumada Al-Ula 1444H corresponding to 13 December 2022G to evaluate a potential merger between the two companies. Both companies will conduct operational, technical, financial, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the potential merger.
• The Company and Alinma Tokio Marine Co have agreed that, in the event of signing the binding merger agreement, securing the regulators’ and shareholders’ general assembly approvals, the potential merger will be consummated on a share-for-share basis, with the surviving entity issuing new common shares to the shareholders of the merging entity, and assuming all the rights and obligations of the merging entity. • The share-for-share exchange ratio between the shareholders of the Company and the shareholders of Alinma Tokio Marine Co ("Exchange Ratio") shall be determined after concluding (to the satisfaction of each Party) all necessary due diligence by the Company and Alinma Tokio Marine Co.
• It is anticipated that the surviving entity will absorb all of the employees of merging entity, and there will be no enforced redundancies. |
| Memorandum Signing Date | 2022-12-13 Corresponding to 1444-05-19 |
| Counterparty | Alinma Tokio Marine Co |
| Memorandum Subject | Evaluation of a potential merger Arabian Shield Cooperative Insurance Company and Alinma Tokio Marine Insurance Company |
| Memorandum Duration | The MOU shall terminate on the earlier of:
(i) the execution of the merger agreement by the Company and Alinma Tokio Marine Co (ii) the expiry of the exclusivity period mentioned in the MoU (i.e. 12 months from the date of signing the MoU), (iii) the mutual written agreement of both the Company and Alinma Tokio Marine Co to terminate the MOU, (iv) either the Company or Alinma Tokio Marine Co providing written notice terminating the MOU to the other at any time five (5) months following the date of execution of the MOU. |
| Related Parties | None |
| Financial Impact | The Company will continue to announce any material developments regarding the proposed merger in accordance with the relevant laws and regulations. Meanwhile, the Company intends to continue to conduct business as usual until completion of the proposed merger. |
| Additional Information | The proposed merger is subject to the completion of due diligence to the parties’ satisfaction, agreement on final terms and conditions of the merger agreement, and the approval of the competent authorities and the general assemblies of the Company and Alinma Tokio Marine Co The entry into the MOU does not mean that the proposed merger will be agreed between the two companies. |
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