Al Sagr Insurance and Gulf Union Al Ahlia sign MOU to assess feasibility of merging two companies

Al Sagr Cooperative Insurance Company (the “Company”) announced on Tuesday the signing of a non-binding Memorandum of Understanding (the “MOU”) with Gulf Union Al Ahlia Cooperative Insurance Company on 19/09/2022 to evaluate a potential merger between the two companies.
Both companies will conduct operational, technical, financial, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the potential merger.
• The Company and Gulf Union Al Ahlia Cooperative Insurance Company have agreed that, in the event of signing the binding merger agreement, securing the regulators’ and shareholders’ general assembly approvals, the potential merger will be implemented by way of Share- for – Share, where Gulf Union Alahlia Cooperative Insurance will issue new shares to the Al Sagr Cooperative Insurance Co ’s shareholders in exchange for all issued shares of Al Sagr Cooperative Insurance Co. after the proposed merger is completed.
• The share-for-share exchange ratio between Gulf Union Alahlia and the shareholders of Al Sagr (the “Exchange Ratio”) shall be determined after concluding (to the satisfaction of each party) all necessary due diligence referred to above by Gulf Union Alahlia and Al Sagr, it being understood that the adjusted net equity book value of Gulf Union Al Ahlia and the adjusted book equity value of Al Sagr as reported in their most recent financial statements published on or before the date of signing of the merger agreement (after agreement between the parties on necessary adjustments resulting from the due diligence process mentioned above) will be the basis for agreeing the Exchange Ratio.
• The Company has appointed Alinma Investment as its Financial Advisor for the proposed merger
The MOU would expire on the earlier of the signing of the merger agreement or after a period of 9 months from the date of the MOU. The MOU can be extended by mutual consent of the parties thereto. Each party has the absolute right to terminate the MOU by providing written notice to the other party at any time for any reason without liability in relation.
The Company will continue to announce any material developments regarding the proposed merger in accordance with the relevant laws and regulations.
Meanwhile, the Company intends to continue to conduct business as usual until completion of the proposed merger.
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 the Company and Gulf Union Al Ahlia.
The entry into the MOU does not mean that the proposed merger will be agreed between the two companies. Further announcements will be made when appropriate.