MEDGULF, Buruj shake hands on binding merger deal

Logos of Mediterranean and Gulf Insurance and Reinsurance Co. (MEDGULF) and Buruj Cooperative Insurance Co.

The Mediterranean and Gulf Insurance and Reinsurance Co. (MEDGULF) entered into a binding merger agreement with Buruj Cooperative Insurance Co., pursuant to which Buruj will merge into MEDGULF.

Accordingly, MEDGULF will subsume all of Buruj’s rights, liabilities, assets and contracts.

For More Mergers and Acquisitions

In exchange, MEDGULF will issue 33.16 million new ordinary shares with a nominal value of SAR 10 each to Buruj shareholders.

In separate statements to Tadawul, both insurers said that reaching a merger agreement represents MEDGULF’s firm intention to make an offer pursuant to the merger and in accordance with the conditions and provisions of the merger agreement.

Under the agreement, Buruj shareholders will receive 1.11 shares in MEDGULF for each share they own in Buruj. Once all conditions of the merger agreement are fulfilled and the merger decision is officially enacted by updating the commercial registry, MEDGULF will be the surviving entity and Buruj will dissolve by law.

Buruj shares will be cancelled.

The two companies further stated that, based on the agreed share swap ratio and the closing price of MEDGULF shares at SAR 17.63 on July 24, 2025, which was the last trading day before the signing and announcement of the merger agreement, the implied valuation of each Buruj share for the purposes of the merger stands at approximately SAR 19.49. This results in a total equity valuation for Buruj of around SAR 584.57 million as part of the merger deal.

This implied valuation represents an increase of 2.66% over Buruj’s actual closing price of SAR 18.98, recorded on July 24—the final trading session prior to the merger announcement.

The two companies clarified that the transaction does not include any related parties, and that none of the board members of either company has any interest in the deal.

They also stated that there will be no immediate changes to the operations of either company as a result of the announcement. Both MEDGULF and Buruj will continue to conduct their business independently and as usual until the merger process is complete.

The following table illustrates the major shareholders in MEDGULF after the merger decision and the issuance of the consideration shares:

*In addition to 9.24% stake owned indirectly through controlled entities, bringing the total to approximately 12%.

According to data available on Argaam, MEDGULF and Buruj signed a non-binding memorandum of understanding (MoU) in July 2024 to evaluate the feasibility of a potential merger.

In January 2025, both insurers received no objection from the General Authority for Competition (GAC) regarding the completion of the economic concentration resulting from the proposed merger transaction.