MEDGULF, Buruj open creditor objection period for merger

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

The Mediterranean and Gulf Insurance and Reinsurance Co. (MEDGULF) and Buruj Cooperative Insurance Co. announced the start of the creditors’ objection period for the planned merger between the two companies.

According to statements to Tadawul, the shareholder circular, offer document, and timeline will be released at a later date, with further announcements to be made in due course.

The objection period runs from today, Sept. 24, to Oct. 9. Creditors of Buruj may object to the merger following the procedure outlined in the company’s announcement.

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An objection does not halt the merger. If a creditor objects, the merged company must settle the debt if it is due or provide sufficient guarantees if deferred.

Creditors who have not received payment or adequate guarantees may approach the competent judicial authority at least ten days before the scheduled merger decision.

The authority may order payment or guarantee provision, or, if the merger would cause significant harm to the creditor and the companies cannot fulfill the obligation, it may suspend or delay the merger. If a ruling occurs after the merger and validates the creditor’s claim, the authority may order compensation for any resulting damages.

The merger remains subject to other conditions, including shareholder approvals from MEDGULF and Buruj, as well as other requirements outlined in the merger agreement announcement.

Both companies said they will announce any material developments regarding the merger in due course.

According to data available with Argaam, the Capital Market Authority (CMA) approved MEDGULF’s request to increase its capital from SAR 1.05 billion to SAR 1.38 billion through issuing 33.16 million ordinary shares.

The capital hike is coming for a potential merger with Buruj, under which the latter's assets and liabilities would be transferred to MEDGULF through a share swap agreement.

MEDGULF and Buruj signed a non-binding memorandum of understanding (MoU) in July 2024 to assess the feasibility of merging.

In January 2025, both companies received a non-objection from the General Authority for Competition (GAC) regarding the economic concentration resulting from the proposed merger.