Fairfax Financial Holdings Limited and Kuwait Projects Company have signed an agreement that will see Fairfax acquire 46.32% of the equity of Gulf Insurance Group (GIG), which is under the control of KIPCO and some of its affiliates.
Following the agreement, Fairfax’s equity interest in GIG will increase from 43.69% to 90.01%.
The KIPCO Sellers’ shares in GIG will be acquired by Fairfax for 263,653,200 Kuwaiti Dinar (about $860 million). Fairfax will pay the full purchase price of less than $200 million to the KIPCO Sellers after the settlement of the transaction, while KIPCO will receive four equal annual payments of $165 million.
The transaction is subject to regulatory approvals from capital markets, stock exchange, and insurance regulators in each relevant jurisdiction in which GIG operates.
Prem Watsa, Chairman and CEO of Fairfax, noted that GIG is among the largest and most diversified insurance groups in the Middle East and North Africa region, with operations in 13 different countries and a market-leading presence in Kuwait, Jordan, Bahrain, and Egypt.
He expressed excitement about the opportunity to expand their insurance operations in the rapidly growing Middle East and North Africa market.
"We are thankful to our partners at KIPCO for giving us this opportunity to expand our insurance operations in the rapidly growing Middle East and North Africa market," Watsa said.
KIPCO’s Group CEO, Sheikha Dana Naser Sabah Al Ahmad Al Sabah, said that the partnership with Fairfax had grown Gulf Insurance Group into a leading player in the MENA insurance market.
She expressed confidence that GIG will continue to grow under Fairfax’s leadership and remain a leading player in the market.
"As a holding investment company, KIPCO's strategy is to acquire, scale, and exit companies when the time is opportune. Our journey has been one of success, and we believe that GIG will continue to grow under Fairfax and remain a leading player in the market," she said.
Khaled Saoud al Hasan, Group CEO of Gulf Insurance Group, thanked KIPCO for believing in GIG, which posted a net profit of $124.7 million for the financial year 2022. He expressed the company's commitment to the GCC markets and the GIG Group’s continued growth potential.
He also stated that the company will continue to work with its decentralized operating model that allows all subsidiaries to operate independently while benefiting from Fairfax's knowledge and collective experience in over 40 markets around the world.
The acquisition of GIG is set to benefit Fairfax, which has been in the insurance and investment management industry for almost 40 years. The opportunity to become part of a global insurance brand such as Fairfax will allow GIG to further leverage each other’s and Fairfax’s expertise.
Paul Adamson, CEO of GIG Gulf, said that the collaboration with the new shareholders, both KIPCO and Fairfax, has been extremely smooth and positive. He said he is convinced that Fairfax is well placed to ensure that GIG continues with its plan to be a leading regional insurer and pursue its growth path.
The transaction is subject to the receipt of all necessary approvals from applicable regulators, including merger control, capital markets, stock exchange, and insurance regulators in each relevant jurisdiction in which GIG operates.
Also, the transaction will be beneficial to all parties involved and will further cement Fairfax’s leadership in the insurance industry in the Middle East and North Africa region.
