Arabian Shield Insurance signs a merger agreement with Al-Ahly Takaful, increasing its capital to more than 638 million riyals

Arabian Shield Cooperative Insurance Company (“Arabian Shield”) announced that it has signed a binding merger agreement on the date 02/12/1442H corresponding to 12/07/2021م G with Al-Ahli Takaful Company, whereby Arabian Shield will purchase all shares of Al-Ahli Takaful shareholders through a share swap offer without payment for cash, provided that the swap process will be carried out by increasing the capital of Arabian Shield by issuing new ordinary shares to Al-Ahli Takaful shareholders. If the merger deal is approved by all relevant government entities and by the Extraordinary General Assembly of both companies, Arabian Shield will issue 23,852,462 new ordinary shares with a nominal value of (10) Saudi riyals per share in exchange for the purchase of all issued shares in Al-Ahli Takaful Company with a total nominal value of (238,524,620) Saudi riyals, i.e., (1.43) shares in Arabian Shield for every (1) share in Al-Ahli Takaful, the new shares will be issued by increasing the capital of Arabian Shield from (SAR 400,000,000) to (SAR 638,524,620) by increasing the number of shares from (40,000,000) Shares to (63,852,462) ordinary shares, so that the share of the shareholders of Al Ahli Takaful Company will be 37.36% of the capital of Arabian Shield after the increase, and the ownership of the current shareholders of Arabian Shield will decrease from 100% to 62.64%.

H. H. Prince Nayef bin Sultan bin Mohammed bin Saud al Kabir, Chairman of the board of Directors of Arabian Shield, expressed his happiness for this important step in the company's successful journey, which spans almost a quarter of a century, and explained that the proposed merger-if completed and obtained the necessary EGM and regulatory approvals - will help to create a larger, stronger and more solvent entity which will enable it to acquire a greater market share. The experience, technical structure and marketing capabilities that Ahli Takaful has in terms of protection and savings insurance, is believed to enhance the competitive position of Arabian Shield within the protection and savings insurance, in addition to all insurance products in different sectors (general, health). Prince Nayef praised the support of the Saudi Central Bank (SAMA) and the Capital Market Authority (CMA) as part of the implementation of the financial sector development program, one of the Vision 2030 programs, which included an initiative to encourage and facilitate mergers in the insurance sector, which aims to sustain the growth, stability and durability of the sector, increase its contribution to GDP, diversify and digitalize its products, and promote innovation and competition.

Mr. Omar Mohammed Hashem, Chairman of the board of Directors of Al-Ahli Takaful, commented: “This merger between Al Ahli Takaful and Arabian Shield marks a significant moment in the history of both companies. We are delighted to be joining hands with such a strong partner who will complement our own products with their unique offering to the Saudi market. A testament to our similar views of the opportunity ahead of us is the speed and ease with which we have been able to agree on coming together. If we are given all requisite approvals from regulators and shareholders, we believe the opportunity for the combined company to become one of the Kingdom’s leading Insurance companies will be considerable.”

Mr. Naif bin Mesned Almesned, CEO of Al Jazira Capital, the Financial Advisor to Arabian Shield Co - Operative Insurance Company, stated that we are pleased to announce the signing of the binding merger agreement between Arabian Shield Co - Operative Insurance company and Al Ahli Takaful Company, stressing that the mergers contribute to the creation of major economic entities, to keep pace with the kingdom's accelerated economic and financial growth. Our wishes for the two companies to succeed and complete the possible merger..

Mr. Moath Al-Khasawneh, CEO of Falcom Financial Services Company, the financial advisor to Alahli Takaful Company, praised the efforts made during the past period by all parties involved, and expressed his contentment that the two parties reached a final agreement. Also, Mr. Moath confirmed that such mergers would Contribute to the development of the insurance sector in the Kingdom of Saudi Arabia, and create a more efficient and competitive market..