The Clap
Abu Dhabi National Insurance Company “ADNIC” has acquired 51% of the capital of its counterpart, Allianz Saudi Fransi Cooperative Insurance Company “Allianz SF” (8040), for about 133 million dollars (499 million riyals).
The Deal
Allianz SE sold its 51% stake in Allianz Saudi Fransi to ADNIC, The sale of the 30.6 million shares happened at an average price of about 16.31 riyals per share.
It is worth noting that Allianz SE indirectly owned the targeted stake in the Saudi company through its subsidiaries “Allianz Europe BV,” “Allianz France,” and “Allianz Mena Holdings (Bermuda) Limited.” Meanwhile, Banque Saudi Fransi (BSF) owns 14% of Allianz Saudi Fransi shares.
Resignation
The acquisition led to the resignation of four members of the Allianz SF board of directors, with others appointed in their place. The appointments will be presented at the first general assembly meeting for approval.
So What
ADNIC, the largest insurance company in the UAE, stated that its acquisition deal represents a “key pillar” of its strategy, as it will help it expand its presence to include the Kingdom. It added that it will now be able to launch its operational activities in the two largest and fastest-growing insurance markets in the Gulf, the Middle East, and Africa.
Now What
Saudi Arabia aims to increase the contribution of the insurance sector to its non-oil economy to 4.75% by 2030. This requires local companies to:
- Achieve economies of scale through mergers and acquisitions.
- Enhance their investments and maximize their returns to accelerate the reshaping of this sector.
- Innovate new products.
