Enaya says Salama merger set to curb potential risks, calls for shareholder cooperation

Enaya called upon shareholders to cooperate in taking a decision that serves the best interest of the company

Saudi Enaya Cooperative Insurance Co. said that the merger with Salama Cooperative Insurance Co. has been pursued for the purpose of rectifying the company’s regulatory status and avoiding the challenges that the company may face in the event the current merger with Salama is not completed.

According to Enaya statement, failure to complete the merger would result in the continued non-compliance with the minimum statutory capital requirements for insurance companies, which is a mandatory requirement pursuant to Paragraph (5) of Article (3) of the amended Law on the Supervision of Cooperative Insurance Companies, issued under Royal Decree No. (M/12) dated 23/01/1443H, which stipulates that “the paid-up capital shall not be less than SAR 300 million.”

In the event of continued non-compliance with the law issued by Royal Decree, the company may be subject to severe measures that may not be remediable in the future. This necessitates that shareholders fully appreciate the seriousness of this matter and the importance of cooperating in taking a decision that serves the best interest of the company, particularly in light of the challenges facing the insurance sector in general and the strict requirements related to compliance with minimum capital requirements in particular, the statement added.

Enaya also stated that its board of directors has given this matter the utmost attention and has worked directly and intensively with the relevant concerned authorities. The board has endeavored to propose several optimal options to meet the statutory requirements, in full coordination with the competent regulatory authorities, which included proposing two merger recommendations and one capital increase recommendation to meet the statutory capital requirements, as follows:

First: Merger with Amana Cooperative Insurance Co., for which the merger agreement was signed on April 29, 2021; however, this proposal was rejected by shareholders at the Extraordinary General Assembly held on Jan. 9, 2022.

Second: Merger with United Cooperative Assurance Co., for which the merger agreement was signed on May 31, 2023; this proposal was also rejected by shareholders at the EGM held on Jan. 9, 2022.

Third: A recommendation to increase the company’s capital in order to comply with the minimum statutory capital requirements for insurance companies and to strengthen the company’s financial solvency; this recommendation was rejected by shareholders at the EGM held on Nov. 28, 2024.

Accordingly, and in line with the board of directors’ responsibilities toward the company, and its full commitment to safeguarding its interests and avoiding exposure to any future risks or damages, the board hopes that shareholders will assume their role and demonstrate a sense of responsibility by giving due consideration to the board’s recommendation to merge with Salama Cooperative Insurance, particularly in light of the strategic benefits resulting from the merger, which include enhancing financial solvency and capacity, reducing costs, improving operational efficiency, complying with regulatory requirements, benefiting from incentive exemptions from statutory fees, diversifying products and services, and increasing market share, the statement added.

Enaya also noted that shareholders may refer to the board of Directors’ circular announced on Dec. 4, 2025, in which it outlined the details of the merger.

According to data available with Argaam, Enaya shareholders will hold an extraordinary general assembly meeting on Jan. 4, 2026 to vote Salama’s offer submitted for the purpose of merging Enaya into Salama, through the issuance of 18.89 million new shares of Salama and the termination of Enaya accordingly.