Malath Cooperative Insurance and Reinsurance Co. has reached an agreement with Allied Cooperative Insurance Group (ACIG) to examine the feasibility of a potential merger between the two Saudi Arabia-based firms.

The insurers will sign a nonbinding memorandum of understanding within 12 months to review the related financial, technical and legal aspects of the potential tie-up, Argaam reported March 8.

Any deal will be subject to approval from shareholders and regulatory authorities. Further developments of the potential transaction will be announced in due course, Malath reportedly said.

Earlier in March, Saudi Arabia-listed firms Gulf General Cooperative Insurance Co. and Al Ahlia Cooperative announced that they have initiated initial talks for a potential merger, Argaam reported.