Dubai: The latest merger deal in the UAE insurance sector gets going, with Salama set to acquire Takaful Emarat in an all-share deal. The formal agreement to this effect will be signed before year-end, and will see Takaful Emarat’s operations merged into Salama.
The full integration will require a further 6-12 months, which would mean by Q3/Q4 of 2023. The announcement comes as consolidation in the UAE insurance sector gathers momentum. This one follows closely in the footsteps of that between Dar Al Takaful and Watania.
“Existing shareholders of Takaful Emarat shall be issued new shares in Salama upon the merger becoming effective,” said a statement. “The merger presents an opportunity to realise business synergies and improve overall performance of Salama (as the surviving entity following the merger) and enhance its capacity to capture a larger market share.”
The combined asset base of the merged entity can meet ‘all applicable solvency requirements’.
A larger customer base is expected to allow Salama to extend coverage in terms of network and service providers.
'Salama’s Participating Insurer (PI) license is expected to help in retaining and growing the legacy PI business of Takaful Emarat," the company added.
Steps leading to the deal
An assessment committee has been formed by the two companies, which has already had one meeting and with more scheduled.
The committee has up to 90 days to submit its findings to the director-general of the UAE Central Bank, and which will contain an assessment of the assets, rights and obligations of Salama and Takaful Emarat.
The insurers ‘propose to commence the approval process from SCA (Securities and Commodities Authority) in tandem with the approval process at the Central Bank and will submit documentation next month’.
“The transaction is expected to be signed during the fourth quarter of 2022, subject to approval of the Central Bank and SCA.”
