Riyadh, Saudi Arabia — The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (Medgulf) signed a binding merger agreement with Buruj Cooperative Insurance Company on July 26, 2025. Under the deal, Buruj will be fully absorbed into Medgulf. All of Buruj’s assets, liabilities, contracts, and operations will transfer to Medgulf.
As part of the agreement, Medgulf will issue 33,157,894 new shares—each with a nominal value of SAR 10—to Buruj shareholders. This transaction will raise Medgulf’s capital by SAR 331.578 million. As a result, its total capital will increase from SAR 1.05 billion to SAR 1.381 billion, marking a 31.58% expansion. Moreover, Medgulf’s total outstanding shares will rise from 105 million to 138.157 million.
Capital Expansion and Shareholder Implications
According to the merger terms, each Buruj shareholder will receive 1.1052 Medgulf shares for every share they own as of the second trading session after shareholder approval. The structure is based on Articles 225 and 227–229 of the Companies Law. It complies with the Capital Market Authority’s Merger and Acquisition Regulations.
Medgulf will remain the surviving entity. In contrast, Buruj will cease to exist and its shares will be delisted. The General Authority for Competition approved the economic concentration of the merger in January 2025.
Based on Medgulf’s closing share price of SAR 17.63 on July 24, 2025, the implied value of Buruj shares stands at SAR 19.49. This figure represents a 2.66% premium over Buruj’s market value of SAR 18.98. However, both companies noted that the deal still requires shareholder approval. They also committed to disclosing any material updates.
In summary, the Medgulf Buruj merger deal reflects Saudi Arabia’s broader trend of consolidation in the insurance sector. Capital efficiency and scale are now crucial for meeting the rising demands of both regulatory and operational requirements.
THE SAUDI STANDARD’S VIEW: Medgulf–Buruj Merger Advances Consolidation in Strategic Insurance Sector
The binding merger between Medgulf and Buruj marks a pivotal step in consolidating Saudi Arabia’s insurance sector. With a 31.58% capital increase and the full absorption of Buruj’s assets, this deal supports national goals to build stronger insurers capable of meeting the evolving economic and regulatory needs of Vision 2030.
The capital increase of SAR 331.578 million will raise Medgulf’s total to SAR 1.381 billion. This change enhances both its underwriting capacity and market footprint. The share exchange ratio—1.1052 Medgulf shares for each Buruj share—offers a modest 2.66% premium. It reflects a fair balance between valuation and shareholder interests.
Furthermore, regulatory backing from the General Authority for Competition signals a policy push toward greater scale and efficiency. Consolidation brings stronger capital adequacy, operational synergies, and improved service across a diverse client base.
With Buruj’s full integration, Medgulf gains access to broader product offerings and expanded regional reach. These advantages are crucial in a sector tied closely to healthcare, transport, real estate, and SMEs.
This Medgulf Buruj merger deal also illustrates the increasing maturity of Saudi M&A practices. It follows a clear legal framework under the Companies Law, Merger and Acquisition Regulations, and CMA listing rules—an essential foundation for investor trust and market stability.
As Saudi Arabia advances insurance reform and promotes scale-driven competition, this merger stands as a model for strategic consolidation. It opens a new chapter of sector strength, innovation, and integration—vital for a rapidly transforming economy.
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