Two Saudi insurers MEDGULF and Buruj finalise merger deal

The Mediterranean and Gulf Insurance and Reinsurance (MEDGULF) has entered into a merger with Buruj Cooperative Insurance, marking a major consolidation move in Saudi Arabia’s insurance sector.

Under the terms of the binding merger deal, Buruj will merge into MEDGULF, transferring all its rights, obligations, assets and contracts to the larger insurer.

The deal will be executed via a share swap, with MEDGULF issuing 33.16 million new ordinary shares at a nominal value of SAR 10 each to Buruj shareholders.

Based on the agreed swap ratio, Buruj shareholders will receive 1.11 MEDGULF shares for each share they currently own.

The deal implies a valuation of SAR 19.49 per Buruj share, a 2.66% premium on Buruj’s closing price of SAR 18.98 on July 24—the last trading day before the agreement was signed. The implied total equity value of Buruj stands at SAR 584.57 million.

The two Saudi firms confirmed that the merger is not subject to any related-party transactions and no board members from either side have a financial interest in the deal.

Once the conditions of the merger agreement are satisfied, and the commercial registry is updated, MEDGULF will become the surviving legal entity and Buruj will be dissolved. Buruj’s shares will be cancelled as part of the transaction.

According to regulatory filings with Tadawul, the transaction will increase MEDGULF’s share capital from SAR 1.05 billion to SAR 1.38 billion, a rise of 31.58%. The new total number of MEDGULF shares will be 138.16 million, with former Buruj shareholders holding a 24% stake in the combined entity.

The insurers also clarified that the announcement will not trigger any immediate operational changes. Both businesses will continue to run independently until the merger process concludes.

Major shareholders in MEDGULF following the deal will include Saudi Investment Bank (14.44%), Rakan Abdullah Rashed Abunayyan (9.16%), MEDGULF BSC of Bahrain (8.68%), and Cigalah Multi-Industries Co. (6.84%).

Yousuf Naghi will hold a direct stake of 2.76%, rising to approximately 12% when including indirect holdings through controlled entities.

The deal follows the signing of a non-binding memorandum of understanding between the two insurers in July 2024. In January 2025, the Saudi government’s General Authority for Competition gave its clearance for the proposed merger.

Both companies said the signing of the agreement represents MEDGULF’s “firm intention” to proceed with the merger, in accordance with agreed terms and regulatory procedures.