Islamic Finance

Solidarity Saudi Takaful, Aljazira Takaful Taawuni sign MOU to evaluate potential merger

Solidarity Saudi Takaful and Aljazira Takaful Taawuni have signed a non-binding MOU to evaluate a potential merger between the companies.

Solidarity said in a bourse filing on Thursday that in the event the proposed merger goes through, it will be implemented by a share swap that will see Aljazira issue new shares to Solidarity’s shareholders in exchange for all issued shares of Solidarity.

The two companies have initially agreed that the methodology used for valuation will be based on equity book value and that the swap ratio between Aljazira and the shareholders of Solidarity shall be calculated using the respective adjusted equity book value per share as at a mutually agreed cut-off date.

The MOU will expire upon the signing of the merger agreement or at the end of the first quarter of 2020, whichever is earlier.

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