SALAMA, an Islamic insurance, has revealed that it has received preliminary regulatory clearance for a merger with Takaful Emarat and is also in talks to buy a stake in Aman, a third insurer.
The moves will elevate Salama to become one of the world’s top five largest Islamic insurers, the company said in a statement to Dubai Financial Market (DFM) today.
The DFM statement confirmed media reports on Sunday and said Salama is working to fulfill legal and regulatory requirements and Securities & Commodity Authority (SCA) approval.
“The merger between Salama and Takaful Emarat is anticipated to be a non-cash transaction via the issuance of additional shares by Salama to Takaful Emarat shareholders to consummate the merger,” the statement said.
“The transaction is expected to be complementary and accretive to the shareholders. Salama expects significant merger synergies upon completion.”
The statement added: “Salama is currently the largest Takaful company in UAE. Upon completion of these transactions, Salama expects to extend its market-leading position in UAE and is expected to become one of the top five largest takaful companies in the world.”
In August, Takaful Emarat reported a loss of AED 5.88 million ($1.6 million) in its second quarter financial results, with auditor EY saying it had failed to meet its minimum capital requirements of AED 100 million, while Salama itself announced a capital reduction of $108 million.
Salama said it has also initiated negotiations with Dubai Islamic Insurance and Reinsurance Company PSC (Aman) to acquire a portion of Aman’s general, medical, and family takaful portfolios.
According to the business, the deal is still pending governmental clearances, further talks between the parties, and due diligence. After the merger of Dar Al Takaful and Wataniya, S&P predicted in August that there would be “more consolidation” for GCC Islamic insurers.
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