Walaa Cooperative Insurance Co. has entered into a binding merger agreement with MetLife AIG ANB Cooperative Insurance Co. to acquire all shares held by the latter's shareholders.
The potential transaction will be done through an exchange of shares, without any cash consideration, equivalent to 0.66 share in Walaa Cooperative for every share in MetLife AIG ANB.
Walaa Cooperative will issue 11,839,706 new ordinary shares for a nominal aggregate value of 118.4 million Saudi Arabian riyals upon receiving approval from governmental authorities and from each of the companies' extraordinary general assemblies.
The increase in the number of Walaa Cooperative ordinary shares to 64,639,706 from 52,800,000 will lead to an increase in share capital to 646.4 million Saudi Arabian riyals. Following the capital increase, the ownership percentage of the shareholders in MetLife AIG ANB will be 18.32% of Walaa Cooperative's share capital, and the ownership percentage of the current shareholders in Walaa Cooperative will be reduced to 81.68% from 100%.
MetLife AIG ANB, including its assets and liabilites, will be absorbed and merged into Walaa Cooperative. Once the deal closes, MetLife AIG ANB's shares will be delisted.
The merged entities will conduct business under their corporate names until the merger closes, after which the merged entity will conduct business under Walaa Cooperative. Walaa Cooperative CEO Johnson Varughese and CFO Mohannad Mahmoud AlDesouki will lead the merged entity.
Walaa Cooperative's board of directors determined that the merger terms are fair and reasonable. The terms include a breakup fee indemnity amount to 3 million Saudi Arabian riyals, payable under certain circumstances.
Al Jazira Capital served as financial adviser of Walaa Cooperative in the transaction.
As of Sept. 30, US$1 was equivalent to 3.75 Saudi Arabian riyals.
