Gulf Union Cooperative Insurance Company (SASE:8120) signed a memorandum of understanding (MoU) to acquire Al-Ahlia for Cooperative Insurance Company (SASE:8140) for approximately SAR 150 million in stock on June 20, 2017. Under the terms of the transaction, Gulf Union will issue 0.5625 new shares for every one issued share of Al-Ahlia. Gulf Union will issue 9 million new shares. The MoU will expire date falling 20 weeks from date of the signing MoU. As of November 6, 2017, Al-Ahlia and Gulf Union extended their non-binding MoU for another 20 weeks. The due diligence process is expected to be finalized in the first quarter of 2018. As of March 27, 2018, Al-Ahlia and Gulf Union extended the MoU for another 20 weeks to complete due diligence for the merger. Gulf Union Cooperative Insurance Company signed a merger agreement to acquire Al-Ahlia for Cooperative Insurance Company for approximately SAR 150 million on May 10, 2018. Under the deal, Gulf Union will issue one new share in Gulf Union in exchange for 1.740357 shares of Al Ahlia. Upon completion, Al-Ahlia will become a fully owned subsidiary of Gulf Union. Post acquisition, The board will consist of 9 members of which 6 will be nominated by Gulf Union and 3 by Al Ahlia. Abdul Aziz Al Turki will be the chairman of Gulf union after merger. Either company may by 30 days give written notice to the other to terminate the MoU.

The transaction is subject to consummation of due diligence investigation, approval of Saudi Arabian Monetary Authority (SAMA), Capital Markets Authority, the approval of the Council for Competition Protection, the approval at the general assembly of each company, and the approval of the competent Saudi Arabian regulatory authorities. As announced on May 15, 2018, Saudi Arabian Monetary Authority has approved the transaction. The merger awaits approval from the extraordinary general meetings of either party and other regulatory approvals. The meeting of the shareholders of Al-Ahlia is scheduled for January 27, 2018. As of August 7, 2018, the transaction is approved by Saudi General Authority for Competition. As on February 18, 2019, the shareholders of Al-Ahlia rejected the merger offer in the shareholder's meeting. The shareholders also refused the authorization of the board of directors, or any person so authorized by the board to adopt any resolution or take any action that may be necessary to implement the resolution regarding the merger.

Wasatah Capital acted as financial advisor and Shearman & Sterling LLP in association with Dr. Sultan Almasoud & Partners acted as legal advisor for Al-Ahlia. Saudi Kuwaiti Finance House S.S.C. acted as financial advisor and Wissam Hachem of Al-Enezee in association with Holman Fenwick Willan LLP acted as legal advisor for Gulf Union.

Gulf Union Cooperative Insurance Co. (SASE:8120) cancelled the acquisition of Al-Ahlia Insurance Co. (SASE:8140) on August 2, 2019.