The merger of Dubai-based Dar Al Takaful (DAT) and Abu Dhabi-based Watania has been approved by the shareholders of the two firms.

The merger of two Islamic insurance companies will lead to the formation of the largest Takaful provider in the UAE, by market share.

“The merger is expected to unlock value for all stakeholders, as a result of considerable cost and revenue synergies, and on the back of optimized sales channels, reduced operating expenses and enhanced IT platforms,” the companies said in their press release.

As per the deal, Watania shareholders will receive 0.734375 DAT shares for every Watania share that they own.

DAT will be the surviving entity and will continue to be listed on Dubai Financial Market.

The deal values the merged entity at AED260,156,250 million.

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Noor Takaful Family and Noor Takaful General, subsidiaries of DAT, will hold all DAT and Watania policies.

DAT will be the holding company that owns the two entities.

DAT chairman Matar Hamdan Sultan Hamad Al Ameri said: “The transaction would enable DAT to expand not only within the UAE, but potentially across the region, fulfilling a core objective of takaful by broadening its base of policyholders and supporting profitability in the pool.

“The merger would also support the UAE’s expanding role as a global leader in Islamic finance.”

Watania chairman Ali Saeed Bin Harmal Aldhaheri said: “Our enhanced financial base and the substantial revenue and cost synergies expected to arise from the merger, would enable us to offer reliable and more comprehensive coverage with terms that are highly favorable for policyholders and to create substantial long-term value to our shareholders.”  

Ali Saeed Bin Harmal Aldhaheri will be the chairman of DAT after the completion of the merger, while Matar Hamdan Sultan Hamad Al Ameri would be the vice-chairman.

DAT will continue to be led by Gautam Datta as the CEO.

The deal has already received preliminary regulatory approvals and is now subject to final approvals from the Central Bank, the UAE insurance regulator, and SCA, the regulator of listed companies.

The merger is slated to conclude by the end of June this year.