On Tuesday, the shareholders of Dubai-based Dar Al Takaful (DAT) and Abu Dhabi-based Watania announced a merger that will establish the UAE’s largest Takaful provider by market share.
According to the planned structure, the merger will include a share swap, with shareholders of Watania, which is presently listed on the Abu Dhabi Securities Exchange, receiving shares in DAT, which will stay listed on the Dubai Financial Market.
Watania shareholders would receive 0.734375 DAT shares for every Watania share they own under the terms of the transaction, valuing the combined business at Dh260.15 million.
All DAT and Watania insurance will be held by two DAT subsidiaries: Noor Takaful Family and Noor Takaful General, with DAT serving as the holding company.
“The purchase would allow DAT to expand not only within the UAE but potentially beyond the region, achieving a key goal of takaful by expanding its base of policyholders and boosting pool profitability.” The merger would also assist the UAE’s growing role as a global leader in Islamic finance, according to DAT Chairman Matar Hamdan Sultan Hamad Al Ameri.
Two DAT subsidiaries, Noor Takaful Family and Noor Takaful General, will hold all DAT and Watania insurance, with DAT serving as the holding company.
“This compelling strategic transaction would allow DAT to leverage its scale as a takaful champion to further develop new and innovative insurance offerings, meeting the ever-changing needs of the market and the public’s requirements for flexible and imaginative Takaful solutions,” said Dr Ali Saeed Bin Harmal Aldhaheri, Chairman of Watania.
Our strengthened financial position, as well as the significant revenue and cost synergies expected as a result of the merger, will enable us to provide more reliable and comprehensive coverage to policyholders on highly favourable terms, while also providing significant long-term value to our shareholders.”
The integration process is now being overseen by a Merger Committee comprised of both DAT and Watania Board members, which is working with independent valuation and financial consultants to reach mutually beneficial and equitable terms.
The process would entail a smooth transfer of policies to the Noor subsidiaries, as well as effective integration of functions, systems, processes, policies, and procedures, in order to create an ideal operating model for the merged business.
