With common interests to further broaden and strengthen its regional insurance business, National Life & General Insurance Company SAOG (NLGIC) – a subsidiary of Oman International Development and Investment Company SAOG (OMINVEST) – has entered a strategic transaction to acquire 100% shareholding in Royal Sun Alliance (RSA) Middle East.
NLGIC will execute the transaction in two parts: (i) purchasing 50.00002% shareholding in RSA Middle East from Sun Alliance Insurance Overseas LTD (SAIO), a fully owned entity of Royal & Sun Alliance Insurance Limited; and (ii) exchanging the remaining shares of RSA Middle East, owned by reputable Saudi shareholders, with new issued NLGIC’s shares, thus making the Saudi shareholders collectively the second largest Shareholders in NLGIC after OMINVEST. The transaction is subject to approvals from the respective regulators and NLGIC’s shareholders.
The agreements have been based on a deep understanding of RSA’s business legacy and capabilities, and on efficient utilization of NLGIC’s knowhow and financial position, aiming to transform the combined entity into a larger, stronger, and more competitive regional insurance player emerging from the Sultanate of Oman.
Describing OMINVEST’s investment philosophy, Khalid Muhammad AlZubair, Chairman of OMINVEST and NLGIC said, “Our investment philosophy at OMINVEST has always been to support and enable our portfolio companies to thrive and grow. OMINVEST has a strong track record of building businesses in the insurance sector. Our largest insurance subsidiary, NLGIC, has remarkably grown locally and regionally. NLGIC’s success is attributable to the significant capital injection from OMINVEST, prudent oversight by its Board, and smart business strategies implemented by the management. We endeavor to work closely with our companies’ boards and management teams to identify, screen, and capitalize on growth opportunities. We provide strategic direction and help our companies draw ultimate roadmaps that would create value for all stakeholders”. He added, “With this transaction, we look forward to a brighter and stronger future for our insurance business, having much bigger impact across the region. Moreover, the transaction will bring foreign direct investment to Oman-based NLGIC”.
On behalf of RSA Middle East shareholders, Adnan Bogary, Chairman of RSA Middle East said: “Health insurance has been considered a major growth opportunity for RSA Middle East, as it is the fastest-growing product line and by far the largest when compared to non-life and life insurance. To tap into that, we needed a partner with experience in the health space and deep knowledge of the Middle East region”. He added, “This strategic agreement will foster strong partnership between NLGIC and our RSA Middle East shareholders and will pave the way for developing a diversified portfolio, as well as regional scale-up. We look forward to taking this business to new heights with our new partners”.
Given RSA Middle East’s strong customer base and solid business track record in the region, the transaction will help NLGIC grow its insurance business by optimizing operations in the Sultanate of Oman and in the United Arab Emirates while gaining access to a larger market in the Kingdom of Saudi Arabia. The combined business of NLGIC and RSA Middle East will create incremental value for all stakeholders. In addition, it will create a full-fledge well-diversified insurance player, offering a broad array of insurance products and services to individual and corporate customers in Oman, KSA, UAE, Kuwait, and Bahrain.
The agreement will help both entities reach new markets, seek top-line growth opportunities, rationalize cost, cross-sell products, implement top-notch technologies and innovations, and complement each other’s business offerings in the region, which will add tremendous value to the customers and fuel business growth.
The transaction is expected to be completed swiftly post relevant approvals.
It is worth mentioning that RSA Middle East is a leading provider of property and casualty insurance in the Middle East. It offers solutions for both commercial and retail clients, across a range of product lines, including motor, property, medical, SME as well as tailored solutions for large corporates. It has operated in the region for over 50 years, bringing best-in-class international solutions and expertise to the Middle East. RSA Middle East is a joint venture formed by RSA Insurance Group plc, with majority shareholding, and regional shareholders in the Middle East. It has operations in Bahrain, UAE, Oman and the Kingdom of Saudi Arabia.