Delek Group said it signed a non-binding deal to sell its insurance unit Phoenix Holdings to China’s Fujian Yango Group for at least 1.85 billion shekels ($481 million) in cash, according to a notification from Delek Group to the Tel Aviv Stock Exchange on Sunday.
The notice states that the deal for Delek’s 52.3 percent stake in Phoenix is subject to due diligence and regulatory approvals. The main obstacle to the deal will be obtaining approval from the regulator, the Supervisor of Capital Markets, Insurance and Savings in the Ministry of Finance.
This will not be easy, given that up to now the regulator has not approved the acquisition of Israeli insurance companies by Chinese buyers, the Chinese company concerned has no known financial activity, and obtaining approval is a challenge for any potential buyer, Globes reports.
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Only a few months ago, the sale by Delek to Chinese giant Fosun was cancelled. After more than a year of talks, the two sides reached a binding agreement in June 2015, but gave up after “the preconditions stipulated in the agreement were not all fulfilled.”
Delek Group, controlled by Yitzhak Tshuva, and U.S. insurer AmTrust Financial Services, In March, signed a non-binding agreement to sell Phoenix. Source told Reuters it was cancelled by both sides.
Delek had previously agreed to sell its Phoenix stake to China’s Fosun International for 1.8 billion shekels ($1 = 3.8460). After more than a year of talks, the two sides reached a binding agreement in June 2015, but gave up after “the preconditions stipulated in the agreement were not all fulfilled.” According to Globes.
