‎UCA, Saudi Enaya sign non-binding MoU to study potential merger

‎UCA, Saudi Enaya sign non-binding MoU to study potential merger

United Cooperative Assurance Co. (UCA) and Saudi Enaya Cooperative Insurance Co. signed a non-binding memorandum of understanding (MoU) on Dec. 5 to evaluate a potential merger between the two companies.

Both companies will conduct technical, financial, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the potential merger, the two insurers said in separate statements to Tadawul.

The merger, if agreed upon, will be implemented through share swap. UCA will issue new shares to Saudi Enaya shareholders in exchange for all of the latter’s issued shares.

The two companies agreed that the methodology used for valuation will be based on equity book value (after any mutually agreed due diligence adjustments) and that the swap ratio will be calculated using the respective adjusted equity book value per share as at a mutually agreed cut-off date.

UCA appointed Alinma Capital as its financial advisor for the proposed merger, while Saudi Enaya said it will appoint a financial advisor and announce it on a later date.

The financial and other advisors involved in the due diligence and verification process are expected to evaluate the financial strength rating, performance record, product offerings, potential business opportunities, potential merger incentives, if any, compliance costs