The merger of Solidarity General Takaful and Al Ahlia Insurance Company of Bahrain has been approved by the shareholders of the two companies.

The merger will be effected in December 2017, said a statement.

The combined entity, which is set to be named “Solidarity Bahrain B.S.C.”, will have a paid up capital of BD11.2 million and anticipated to have a 15 per cent market share with 10 branch locations serving customers throughout the country, making it the largest Takaful insurance company in Bahrain.

Under the terms of the merger agreement, Solidarity General Takaful shareholders will be entitled to receive 2.5 shares of Al Ahlia stock for each share of Solidarity General Takaful, on the basis of the independent valuations as required by the Central Bank of Bahrain.

In order to facilitate the merger, Al Ahlia shareholders approved the conversion of the insurance license from conventional to Islamic insurance license (Takaful). The shareholders have also approved the increase of the authorised share capital of Al Ahlia to BD12 million.

AbdulEllah Al Qassimi, vice chairman to the board of directors of Al Ahlia, said: “We celebrate two new milestones, the approval of the conversion of Al Ahlia license to a Takaful license and the approval of the merger with Solidarity General Takaful.”

He added: “Combined under one merged entity Solidarity Bahrain, we will draw on our decades of experience to push the boundaries of customer service innovations and remain focused on delivering outstanding returns to our stakeholders”.

Ashraf Bseisu, chief executive of Solidarity Group Holding, the parent company of both Solidarity General Takaful and Al Ahlia, said: “We acquired a majority share in Al Ahlia in 2016 and we have been very pleased with the commonality of the cultures, operating models and the customer service focus of our two subsidiaries.

“We believe that consolidation has become a necessity in order to create larger and stronger financial institutions capable of offering a unique customer experience.”

“Solidarity Bahrain, the new merged entity will result ultimately in being the largest Takaful company and one of the leading top tier insurance players in Bahrain,” he added.

Following completion of the merger, Solidarity Bahrain will be headed by Jawad Mohamed.