Walaa Insurance Company has signed a non-binding Memorandum of Understanding with SABB Takaful Company, to assess the feasibility of merging the two companies.
According to Arabiya Net, Walaa said in a statement that it will, with SABB Takaful, start the verification process and examine the practical, technical, financial, legal and actuarial aspects, and enter into non-binding discussions regarding the details of Terms and conditions of the proposed merger transaction.
According to the statement, the proposed merger will be completed by way of a share swap whereby Walaa will issue new shares to SABB Takaful shareholders in exchange for all the issued shares in the company upon completion of the merger.
Walaa stated that the share-for-share share-for-share ratio between Wala' and SABB Takaful shareholders will be reached after completing all the necessary due diligence procedures referred to by Before the two companies.
It is understood that the revised book value of SABB Takaful and the revised book value of Walaa Company will be the basis for the approval of the exchange ratio.
Walaa revealed that the exchange ratio between Wala'a and SABB Takaful shareholders will be calculated using the adjusted book value of each SABB Takaful and Wala'a shares, according to another Financial statements published on or before the date of signing the merger agreement.
The Company expected that the financial and other advisors involved in the due diligence and verification process would assess the financial strength rating, performance record, product offerings, potential business opportunities, and potential merger incentives, if any, and commitment costs at the expense of existing contracts at the expense of business operations, employee retention, company location, and any other relevant information that may have an effect on adjustments to book value.
The company also expected that the proposed merger would absorb all SABB Takaful employees in loyalty and not lead to any forced layoffs.
It noted that the memorandum of understanding ends when the two companies sign the merger agreement or after a period of 180 days from the date of the memorandum of understanding, whichever comes first.
She added that the Memorandum of Understanding can be extended with the consent of the two joint companies, and the two companies can jointly agree to terminate the Memorandum of Understanding by giving written notice to this content at any time.
SABB Takaful has appointed Saudi Fransi Capital as the financial advisor for the proposed merger, while Walaa has appointed Al Jazira Capital as the financial advisor for the transaction.
