Buruj, MEDGULF shareholders approve merger

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

Shareholders of Buruj Cooperative Insurance Co. and The Mediterranean and Gulf Insurance and Reinsurance Co. (MEDGULF) approved the merger deal between the two companies in extraordinary general meetings (EGM) on Oct. 23.

Buruj said its shareholders approved MEDGULF’s offer to merge Buruj into MEDGULF, which will result in the dissolution of Buruj as a legal entity.

Following the merger approvals by both companies’ EGMs, trading in Buruj shares will be suspended until the company is delisted from the Saudi Exchange (Tadawul). The delisting is expected to take place within no fewer than three and no more than six trading sessions after the merger resolution date.

MEDGULF stated that its general assembly approved an increase in the company’s capital to complete the merger process, as shown in the following table:

Details of MEDGULF’s capital increase to complete the merger

Both companies’ EGMs approved the merger agreement signed between them on July 26.

They also authorized the board of directors, or any person delegated by it, to issue any decision related to the aforementioned resolutions.

Buruj added that MEDGULF, via its capital increase, will issue 33.16 million MEDGULF shares as consideration shares, to be allocated to Buruj’s shareholders registered in Buruj’s shareholders’ register at the end of the second trading session following the merger resolution date.

The listing and deposit of these consideration shares into the eligible Buruj shareholders’ portfolios are expected to take place within no fewer than three and no more than six trading sessions after the merger resolution date.

Pursuant to Article (228) of Companies Law, the merger resolution shall become effective upon the registration of Buruj’s data in MEDGULF’s commercial register, after which MEDGULF will announce the merger’s effectiveness.

On the other hand, MEDGULF’s EGM ratified amending Article 8 and 15 of the company’s bylaws related to capital and company management.

In accordance with the merger agreement, and subject to obtaining non-objection from the Insurance Authority (IA), The EGM appointed Buruj’s nominees — Yasser Yousef Mohammed Naghi and Ziad Bassam Mohammed Al-Bassam — to the new board seats, effective upon issuance of the merger resolution for both companies.

MEDGULF noted that, following the approval of the merger-related resolutions by the EGMs of both companies, the merger resolution is considered issued.

The merger resolution will result in an increase in MEDGULF’s capital through the issuance of new shares to the eligible shareholders of Buruj, for the purpose of merging Buruj into MEDGULF and transferring all of its rights, obligations, assets, and contracts to MEDGULF.

Eligibility will be limited to Buruj shareholders registered in Buruj’s shareholders’ register at the end of the second trading session following the merger resolution date.

Regarding fractional shares due to eligible Buruj shareholders, MEDGULF stated that these fractions will be aggregated and sold in the market on behalf of Buruj shareholders, and the net proceeds from the sale will be distributed to eligible shareholders in proportion to their entitlements, after deducting any costs related to the sale of fractional shares. A separate announcement will be made once the process is completed.