The shareholders of two of the most prominent Islamic insurance firms in UAE, Abu Dhabi-based Watania and Dubai-based Dar Al Takaful (DAT), on Tuesday, 26 April, declared a merger that will form the largest Takaful provider by market share in the UAE.
As per the proposed structure, the merger will include a share swap, in which shareholders of Watania, who are currently listed on the Abu Dhabi Securities Exchange, will get shares in DAT, which would be the only entity that will continue to be listed on Dubai Financial Market.
Under the merger conditions, shareholders of Watania would get 0.734375 DAT shares for every Watania share that they own, taking the value of the merged firm at Dh260.15 million.
All Watania and DAT policies would be held by two DAT subsidiaries, Noor Takaful General and Noor Takaful Family, with DAT being the holding firm that owns the two entities.
Chairman of DAT, Matar Hamdan Sultan Hamad Al Ameri, said, “The transaction would allow DAT to expand within the UAE and potentially around the region, fulfilling a core purpose of takaful by widening its base of policyholders and supporting profitability in the pool. The merger would also support the UAE’s expanding role as an international leader in Islamic finance.”
Dr Ali Saeed Bin Harmal Aldhaheri, Chairman of Watania, said, “This compelling strategic transaction would enable DAT to leverage its scale as a takaful champion to create new and innovative insurance offerings further, fulfilling the ever-changing needs of the market and the public’s needs for flexible and imaginative Takaful solutions.”
“Our improved financial base and the significant revenue and cost synergies expected from the merger would allow us to offer reliable and more comprehensive coverage with positively favourable terms for policyholders and make substantial long-term value to our shareholders.”
The new entity will also benefit from many cross-selling possibilities via the increased geographic reach and capitalizing on larger underwriting capacity to bargain improved terms with reinsurers.
The process of integration is presently being rigidly handled by a Merger Committee comprising of Board members of both Watania and DAT, which continues to partner up with an independent valuation and financial consultants to arrive at beneficial and equal terms for all parties.