MetLife AIG ANB Cooperative Insurance has signed an agreement with competitor Walaa Cooperative Insurance to explore a potential merger of the two companies.
The two Saudi-based insurers have signed a non-binding memorandum of understanding to carry out technical, financial along with legal and actuarial due diligence.
Saudi Kuwaiti Finance House has been selected by Metlife AIG ANB to serve as the financial adviser for the proposed merger.
The proposed transaction is expected to take place through an exchange of shares. Once the transaction is closed, Walaa will issue new shares to MetLife AIG ANB’s shareholders in exchange for all issued shares of the firm.
MetLife AIG ANB said that the company will announce any material developments with respect to the proposed merger as per the relevant laws and regulations.
Saudi Arabia’s central bank recently proposed much tougher rules related to capital requirements, which seemed to be compelling insurers to combine their operations, reported Reuters.
MetLife AIG ANB was founded by American Life Insurance Company (MetLife Alico), AIG MEA Investments & Services (AIG) and Arab National Bank.
Headquartered in Riyadh, MetLife AIG ANB provides motor insurance, SME insurance, group life and disability insurance, group medical insurance, workmen compensation insurance, marine insurance, among others.