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United Cooperative Assurance Company announces signing a Memorandum of Understanding with Arabia Insurance Cooperative Company to evaluate a potential merger between the two companies.
| Element List | Explanation |
|---|---|
| Introduction | The United Cooperative Assurance Company announces the signing of a non-binding Memorandum of Understanding (the “MOU”) with Arabia Insurance Cooperative Co. on Thursday 23 Dhu al-Hijjah 1446H corresponding to 19 June 2025 to evaluate a potential merger between the two companies (the “Proposed Transaction”). Both companies will conduct technical, financial, tax, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the Proposed Transaction. |
| Memorandum Signing Date | 2025-06-19 Corresponding to 1446-12-23 |
| Counterparty | Arabia Insurance Cooperative Company |
| Memorandum Subject | Evaluation of a Potential Merger of United Cooperative Assurance Company and Arabia Insurance Cooperative Company. |
| Memorandum Duration | The MOU would expire on the earlier of the signing of the merger agreement or after a period of 12 months from the date of the MOU. The MOU can be extended by mutual consent of the parties thereto. Each party has the absolute right to terminate the MOU by providing written notice to the other party at any time for any reason without liability in relation. |
| Related Parties | There are no related parties identified currently. A detailed analysis will be carried out and details of the same, if any, will be announced later. |
| Financial Impact | The United Cooperative Assurance Company will announce any material developments regarding the potential transaction in accordance with relevant laws and regulations. Meanwhile, United Cooperative Assurance Company intends to continue its business as usual until the proposed merger is completed. |
| Additional Information | Major Terms in the Memorandum: Pursuant to the MOU, the United Cooperative Assurance Co. and Arabia Insurance Cooperative Co. have agreed on the following provisions: •The Proposed Transaction, should it proceed, would be implemented through a merger with Arabia Insurance Cooperative Co. being the merging company and the United Cooperative Assurance Co being the merged company, through a share exchange offer through increasing Arabia Insurance Cooperative Co. capital and issuing new shares to the shareholders of the United Cooperative Assurance Co based on a swap ratio to be agreed between the parties. •The two companies have agreed in the MOU that they will negotiate definitive agreements in relation to the Proposed Transaction that will set out the relevant commercial terms thereof, including the final structure and the final swap ratio. •The MOU also includes customary provisions that regulate confidentiality and other related matters. •The implementation of the Proposed Transaction is subject to the two companies agreeing a final binding agreement that determines the terms and conditions of the transaction. The terms and conditions of the final binding agreement will include obtaining all the required regulatory approvals and the approval of the extraordinary general assembly of each company on the Proposed Transaction and its related matters. Therefore, the execution of the MOU does not mean the parties will reach a final and binding decision regarding the Proposed Transaction nor that the Proposed Transaction will be completed. Actions to be Taken by the Company during the Memorandum’s Duration: The two parties will work to complete all the relevant requirements of the Proposed Transaction, including conducting due diligence and executing the definitive binding agreement and obtaining the regulatory approvals, and then present the Proposed Transaction to the shareholders of both companies in accordance with the applicable laws and regulations. Name of Financial Advisor of Each Party: The United Cooperative Assurance Co and Arabia Insurance Cooperative Co. will appoint financial advisors for the proposed merger, and further announcement will be made later. Approvals: The completion of the Proposed Transaction is subject to a number of regulatory approvals, including the approval of the Insurance Authority, the Capital Market Authority, the Saudi Exchange and the General Authority for Competition, and the approval of the extraordinary general assemblies of the shareholders of the United Cooperative Assurance Co. and Arabia Insurance Cooperative Co, in accordance with the relevant regulatory requirements. Additional Information: The proposed merger is subject to the completion of due diligence to the parties’ satisfaction, agreement on final terms and conditions of the merger agreement, and the approval of the competent authorities and the general assemblies of the two companies. The entry into the MoU does not mean that the proposed merger will be agreed between the two companies. |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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