The Saudi-based insurance companies will conduct due diligence and engage in non-binding discussions on the terms and conditions of the potential merger.
Wednesday 19, June 2019 BY KUDAKWASHE MUZORIWA
MetLife AIG ANB has signed a non-binding MoU with Walaa to evaluate a potential merger between the two Saudi-based insurance companies.
In a bourse fining, Met AIG ANB, stated that Walaa has agreed that, in the event the proposed merger occurs, it will be implemented by way of an exchange of shares where, after the proposed merger is completed, Walaa will issue new shares to the company’s shareholders in exchange for all issued shares of the firm.
Metlife AIG ANB said that it has appointed Saudi Kuwait Financial House (KFH) as its financial adviser for the proposed merger in a deal that is likely to be based on a share swap.
The two companies have agreed that the basis of the valuation will be using equity book value and that the exchange ratio between Walaa and the shareholders of the MetLife AIG ANB shall be calculated using the respective reported book value per share of Walaa.
Fitch Ratings said that Bypa Arabia Tawuniya and Med Gulf dominate the health market, accounting for 80 per cent of premiums in 2017, while the other 24 companies, with a combined market share of only 20 per cent, lack scale, which may lead to consolidation.