Dubai-listed Salama has confirmed today (3 October) plans for a merger with Takaful Emarat and that it was also in negotiations to acquire a stake in a third insurer, Aman.
News service Zawya reported that the deals would make Salama one of the world's top five largest Islamic insurer according to Dubai Financial Market statement.
The DFM statement confirmed media reports on Sunday 2 October and said Salama is working to fulfil legal and regulatory requirements as well as Securities & Commodity Authority (SCA) approval.
"The merger between Salama and Takaful Emarat is anticipated to be a non-cash transaction via the issuance of additional shares by Salama to Takaful Emarat shareholders to consummate the merger," the statement said.
"The transaction is expected to be complementary and accretive to the shareholders. Salama expects significant merger synergies upon completion."
The statement added: "Salama is currently the largest Takaful company in UAE. Upon completion of these transactions, Salama expects to extend its market-leading position in UAE and is expected to become one of the top five largest takaful companies in the world."
Salama said it has also initiated negotiations with Dubai Islamic Insurance and Reinsurance Company PSC (Aman) to acquire a portion of Aman's general, medical, and family takaful portfolios.
The transaction is subject to due diligence, further negotiations between the parties, and regulatory approvals, the company said.
Consolidation in the UAE insurance sector is an ongoing trend. In August this year, Dar Al Takaful and Watania agreed a merger, while in April the insurance arm of Oman's OMINVEST acquired RSA Middle East.
Last year, Gulf Insurance Group completed the buyout of French insurance groupAXA's regional interests.
