Dubai: A planned merger between UAE insurers Salama and Takaful Emarat has been called off.
However, the two entities will still proceed with exploring possibilities for ‘alternative arrangements’ that could include the acquisition of the takaful operations of Takaful Emarat – and not the assets of the company.
“Salama has notified the Central Bank of the UAE with that intention and shall discuss with the regulator the way forward,” the insurer said in a statement.
The merger was supposed to have been done through issuing new shares. If the deal had gone through, it would have been the second big one in successive years in UAE's insurance sector. Last year, Dar Al Takaful and Watania went through a high-profile coming together, as UAE insurers moved to consolidate their strengths to take on the changing nature of the post-Covid marketplace.
"A Salama and Takaful Emarat alliance was seen as a done deal," said a market analyst. "All through the final months of 2022, they had made significant progress towards reaching a closure on the deal. The latest announcement was unexpected."
Even without this deal, there will still be action in the weeks ahead for the UAE insurance sector. Aman (or Dubai Islamic Insurance & Reinsurance) is making progress on exiting the insurance space and give itself a makeover as an investment firm. (In October last, the Abu Dhabi National Takaful Co. had reached an initial agreement to acquire the individual life takaful portfolio of Aman.)
"The UAE insurance sector will likely see more consolidation - it's a process of creating the strongest and the fittest," said an insurance industry source. "The authorities are extremely favourable towards that process."
