Saudi Enaya Cooperative Insurance Company inked a non-binding Memorandum of Understanding (MoU) with Amana Cooperative Company 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.
Last month, the insurers started initial discussions to study the merger of the two companies.
Under the 12-month MoU, the parties agreed to implement the merger, in case it occurred, by way of share swap where Amana Cooperative will issue new shares to Saudi Enaya shareholders in exchange for all issued shares of Saudi Enaya.
The methodology used for valuation will be based on equity book value and the swap ratio between Amana Cooperative and Saudi Enaya shareholders shall be calculated using the respective adjusted equity book value per share as at a mutually agreed Cut-Off Date.
In a separate statement, Saudi Enaya said it appointed BMG as the financial advisor for the proposed merger.