Israel-based Delek Group has reached an agreement to sell a 47% stake in insurance company Phoenix Holdings to New York-based Kushner Funding for nearly ILS1.7bn ($498m).

The current pricing values entire Phoenix Holdings at ILS3.6bn ($1.052bn).

As per the terms of the non-binding MOU, the transaction is subject to due diligence, a successful completion of the talks between the parties and the execution of a binding agreement. The binding agreement will be signed after regulatory approvals.

Delek was required to offload its stake in Phoenix Holdings following a new Israeli law passed in December 2013, which prohibits companies from simultaneously holding stake in both financial services companies and other industrial businesses.

Kushner will be entitled to receive a loan from the company as well as a guarantee for funding requirement as a portion of the consideration.

Earlier in April this year, Delek Group was reportedly negotiating with US-based investment consortium to divest its US insurance business, Republic Group, in a transaction, which could be valued nearly $220m.