Published On: Mon, Aug 22nd, 2016

Delek Group Sells Phoenix Stake to China’s Fujian Yango

The sale, part of Delek Group's strategy of focusing on its core energy business.

Itzhak Tshuva Photo by Gil Yohnan

 

Israeli conglomerate Delek Group Ltd. announced today that it had signed an agreement for the sale of its 52.3 precent holding in insurance group Phoenix Holdings Ltd.  to China’s Fujian Yango Group Co, unit  Yango Investment PTE. Ltd., for $516 million (NIS 1.948 billion), in cash to be paid on completion of the deal. The agreement values Phoenix at $981 million (NIS 3.7 billion).

Delek, Led by Itzhak Tshuva, is selling control of Phoenix as part of its continuing efforts to focus on its energy business.

In July, 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 $490 million (NIS 1.85 billion).

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.”

Privately held,  Fujian Yango is not active in insurance and finance. It seems that Yango 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.

The sale still requires approval by Supervisor of Capital Markets, Insurance and Savings, Dorit Salinger.

Delek had previously several attempts to sell Phonix, one of them was to China’s Fosun International for $477 million (1.8 billion shekels). At the end the sides were not met.

In March,   U.S. insurer AmTrust Financial Services, signed a non-binding agreement to buy Phoenix, but it was canceled by both sides.

READ MORE: Phoenix

Itzhak Tshuva Photo by Gil Yohnan

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