Saudi Arabian insurer MedGulf said weighing sale of business

29/05/2017 02:27 AST

The Mediterranean & Gulf Insurance & Reinsurance Co., a Saudi Arabian insurer known as MedGulf, is weighing putting itself up for sale, according to three people familiar with the matter.

MedGulf is working with the investment banking arm of Banque Saudi Fransi to evaluate strategic options for the company, two of the people said, asking not to be identified as the information is private. International insurers seeking access to the kingdom and large family firms within the country may be interested in the insurer, the people said.

MedGulf shares have fallen about 38 per cent this year, giving the Riyadh-based insurer a market value of about $446 million, according to data compiled by Bloomberg. No final agreements had been reached with any of the parties and MedGulf may still remain independent, the people said. MedGulf and Saudi Fransi Capital didn't immediately respond to requests for comment.

Saudi insurance companies are examining potential mergers to better compete in a crowded market. There are 35 insurance companies on listed on the Saudi stock exchange, according to data compiled by Bloomberg.

Malath Cooperative Insurance & Reinsurance Co. and Allied Cooperative Insurance Group in March reached a preliminary agreement to study the feasibility of a merger. The same month, Al-Ahlia Cooperative Insurance and Gulf Union Cooperative Insurance said they started initial talks for merger.

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