Buruj and MedGulf sign agreement for potential merger

Buruj, a multi-line non-life insurance underwriter and insurance group MedGulf, have signed a non-binding Memorandum of Understanding (MOU) to evaluate a potential merger between the two companies.

The MOU aims to establish a framework for the strategic transaction through a share exchange offer.

“Both companies will conduct financial, tax, legal, and actuarial due diligence and engage in non-binding discussions on the terms and conditions of the Proposed Transaction,” the Saudi Exchange filing stated.

If the proposed transaction proceeds, MedGulf will act as the acquiring company, while Buruj will be the acquired firm.

The deal will involve increasing MedGulf’s capital and issuing new shares to Buruj shareholders based on an exchange ratio to be agreed upon by both parties.

The two companies will also negotiate definitive agreements in relation to the Proposed Transaction that will set out the relevant commercial terms thereof, as stated in the MOU.

As well as the final structure of the Proposed Transaction and the final exchange ratio.

The MOU also includes customary provisions that regulate confidentiality and restrictions on trading and other related matters.

While MedGulf has appointed HSBC Saudi Arabia as its financial adviser and Khoshaim & Associates as its legal advisor, Buruj will announce its financial adviser for the proposed transaction at a later stage.

Until the merger is finalised, Buyruj will continue business operations as usual, the firm stated. The Company will continue to announce any material developments regarding the proposed merger in accordance with the relevant laws and regulations.

This deal comes as the government of Saudi Arabia looks to strengthen the insurance sector as part of its Vision 2030 plan to diversify the economy and enhance financial stability.

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