Riyadh – Mubasher: Solidarity Saudi Takaful Company and Aljazira Takaful Taawuni Company signed a non-binding memorandum of understanding (MoU) for a potential merger between the two companies.
Both companies will conduct technical, financial, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the potential merger, according to Solidarity’s statement to the Saudi Stock Exchange (Tadawul) on Thursday.
The two companies agreed that the merger will be implemented via a share swap where Aljazira Takaful will issue new shares to Solidarity Saudi Takaful Company shareholders in exchange for all issued shares of Solidarity Saudi Takaful Company.
The two companies have initially agreed that the methodology used for valuation will be based on equity book value and that the swap ratio between Aljazira Takaful Company and the shareholders of Solidarity Saudi Takaful Company shall be calculated using the respective adjusted equity book value per share as at a mutually agreed Cut-Off Date.
Accordingly, Solidarity has appointed Saudi Kuwaiti Finance House Company (SKFH) as its financial advisor for the proposed merger.
The company noted that the deal would expire on the earlier of the signing of the merger agreement or at the end of the first quarter of 2020.
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 Solidarity Saudi Takaful Company and Aljazira Takaful Company.
