Saudi insurer Enaya's shareholders reject proposed merger with Amana

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RIYADH: The bid to merge two of Saudi Arabia’s insurance companies has been thwarted by shareholders unhappy with the proposal.

Shareholders of Amana Cooperative Insurance Co. had approved the proposal to merge with Saudi Enaya Cooperative Insurance Co., but those of the latter turned down the offer.

This came after they both held meetings on Jan. 9 to conduct a circular to vote on their previously announced merger, according to bourse statements by both parties.

In response to the announcements, shares of Amana and Enaya fell 5 and 1.5 percent, respectively, in early trading today.

As per the deal, post-merger ownership would be a 55-percent stake for Enaya and the remaining 45 percent shall be owned by Amana, as announced in a bourse filing last year.

Additionally, upon completion of the deal, Saudi Enaya’s assets and liabilities shall be transferred to Amana.

Separately, Amana announced the approval of its shareholders to increase capital to SR289 million ($77 million) via a rights issue.

The insurance sector in the Kingdom has seen marked growth over the last few years and in 2020 it produced its best ever financial results.

In a KPMG report published last year net profit in the sector was up by almost 50 percent compared to the same period in 2019.

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