Times of Oman
Nov 29, 2015 LAST UPDATED AT 06:27 PM GMT
Oman's MB group, Al Madina to buy 61 per cent stake in UAE’s Watania
August 26, 2014 | 12:00 AM
Gautam Datta. Photo: Times file

Muscat: Two Oman-based business houses — MB UAE investments and Al Madina Takaful — have received an approval from Securities and Commodities Authority (SCA) of Abu Dhabi for acquiring a combined 60.53 per cent stake in National Takaful Company, popularly known as Watania.

MB UAE Investments, which is part of the MB Holding group, will acquire 51 per cent stake, while Al Madina Takaful will have 9.53 per cent holding in the UAE insurance firm.
"The investment in Watania will enable Al Madina to enter the UAE market, which has a lot of growth potential," Gautam Datta, chief executive officer of Al Madina Takaful, told Times of Oman.

"If we are looking at growth and profitability, there are a lot of constraints in the local market. Growth is very important for our company," he said, adding that it was an investment in line with the company's medium and long term strategy. 

"The UAE is the largest market in terms of gross written premium in the Gulf Cooperation Council (GCC) region. Saudi Arabia may take over from UAE within five years or so, but the latter is still a strong and dominant market. Through this tie-up, we have an access to the UAE market and we can approach it in a focused manner," Datta added. 

Al Madina will invest Dh17.88 million for acquiring 14.30 million shares. According to a rough estimate, the total investment of both firms could be around Dh113.5 million for acquiring 90.8 million shares, which includes an investment of Dh95.61 million from MB group.

Both companies complement each other very well, which was discovered when the company conducted a due diligence before taking the investment decision, Datta also said.

According to Datta, the acquisition will help Al Madina in developing products and systems, besides creating a distribution platform. It will also help the Omani firm to generate high volume business, which is very important for insurance firms. Further, it will help develop a cost-effective re-insurance platform.

He stated that the MB group, which is the largest stakeholder in Al Madina with a 26 per cent holding, joined hands with Al Madina for the strategic investment. "Our total investment in a company should not exceed more than 5 per cent of our investable assets as per the regulation," he noted.

"That is why the MB group decided to form a special purpose vehicle (MB UAE Investments) to acquire 51 per cent stake in Watania, which is a listed firm. MB Holding provides the investment plant form and Al Madina focuses on takaful insurance business. MB group's vision is to create a strong takaful firm," he said.

Datta said the acquisition would be completed by next month. The deadline for the purchase is next February 24, Watania said in a statement.

Among Watania's current shareholders are Abu Dhabi Investment Council, Ajman Bank and Abu Dhabi National Insurance Co, all with around 15.75 per cent of the firm.

To contact our reporter: businesseditor@timesofoman.com

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