(Bloomberg) -- 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 41 percent this year, giving the Riyadh-based insurer a market value of about $425 million, according to data compiled by Bloomberg. The stock dropped as much as 4.9 percent in Riyadh today compared with a 1.1 percent decline for the benchmark Tadawul All Share Index.
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.
To contact the reporters on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net, Dinesh Nair in London at dnair5@bloomberg.net.
To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Stefania Bianchi, Paul Armstrong
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