Al Ahlia for Cooperative Insurance Co. (Al Ahlia) and Gulf Union Cooperative Insurance Co. have extended their non-binding memorandum of understanding (MoU) for a potential merger for another 20 weeks, the insurers said on Tuesday.
The extension is to complete due diligence for the merger, the companies said, adding that any relevant developments will be revealed as they occur.
The MoU, which was initially signed in June, was renewed in November for a similar period.
The merger of the two Tadawul-listed insurers is to be closed via a share swap deal, under which Al Ahlia will become a subsidiary of Gulf Union.
Under the terms of the MoU, Gulf Union will issue 9 million new shares to Al Ahlia shareholders, in exchange for all issued shares in that company.
Accordingly, total issued shares of the merged entity will stand at 24 million, with SAR 240 million in capital.
Gulf Union had earlier appointed Saudi Kuwait Finance House and Al-Enezee in association with Holman Fenwick Willan as its financial and legal advisors respectively for the merger.
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