After several attempts, it is finally happening: Delek Group Ltd. (TASE: DLEKG) announced today that it had signed an agreement for the sale of its 52.3% holding in insurance group The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to Yango Investment PTE. Ltd., a unit of Chinese holding company Fujian Yango Group Co. Ltd., for NIS 1.948 billion, to be paid in cash on completion of the deal. The agreement values Phoenix at NIS 3.7 billion.
Delek is selling control of Phoenix as part of its continuing efforts to shed its financial businesses and focus on its energy business.
Last month, it was reported that Delek Group had signed a non-binding memorandum of understanding with Yango for the sale of its Phoenix stake for not less than NIS 1.85 billion.
The sale still requires approval by Supervisor of Capital Markets, Insurance and Savings Dorit Salinger.
Delek Group CEO Asaf (Asi) Bartfeld said, "We are happy at the signing of the deal, and hope that Yango will receive all the required approvals to enable the deal to be completed."
As far as is known, Fujian Yango is privately held. It is active in several fields, but not in insurance and finance, and it appears that it intends to enter this field through the acquisition of Phoenix.
Phoenix, headed by Eyal Lapidot, is one of the five largest insurance groups in Israel. It has been controlled by Delek Group since 2006. Even if it were not for its strategy of focusing on its energy business, Delek Group would in any case have had to sell Phoenix within the next few years because of the Law for Promotion of Competition and Reduction of Concentration, which places restrictions on simultaneous ownership of significant financial and non-financial companies.
Published by Globes [online], Israel business news - www.globes-online.com - on August 22, 2016
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