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September 5, 2022

Amana Cooperative, ACIG agree to evaluate merger proposal

Saudi Arabia-based insurers Amana Cooperative Insurance Company and Allied Cooperative Insurance Group (ACIG) are assessing the possibility of a merger.

The two companies have inked a non-binding memorandum of understanding (MoU) in this regard.        

As part of the agreement, the insurers will conduct technical, financial, legal as well as actuarial assessments.

The MoU also requires the companies to hold non-binding discussions on the terms and conditions of the potential merger.

Further, the two parties will adopt equity book value-based methodology for valuation.

The non-binding agreement will expire following the merger or after 12 months of signing the MoU.

Amana, in a statement, said the proposed merger will be preceded by necessary assessments as required by the MoU.

The deal is also subject to receipt of clearance by competent authorities and general assemblies of both Amana Cooperative Insurance and ACIG.

However, Amana plans to carry out its business as usual until completion of the proposed merger.

In 2021, Amana Cooperative Insurance and Saudi Enaya Cooperative Insurance agreed on a merger deal worth $272.33m.

However, Saudi Enaya shareholders voted to reject the merger proposal early this year. On the other hand, Amana Cooperative’s shareholders favoured the deal.

As per the terms of the proposed merger, Saudi Enaya would have gained a 55% stake in the merged entity, while Amana Cooperative would have owned the remaining stake. Under the proposed transaction, Saudi Enaya would have transferred its assets and liabilities to Amana Cooperative.

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