The Israeli conglomerate had to sell its stake in Phoenix Insurance to comply with the provisions of the Israeli Market Concentration Law
Delek Group has exited from The Phoenix Holdings, the parent company of Israeli insurer Phoenix Insurance, after closing the sale of its remaining stake of 32.5% to Centerbridge and Gallatin Point Capital investment funds.
The Israeli conglomerate said that the total consideration for the sale will be for NIS1.57bn ($450m), of which it had received NIS1.335bn ($380m) in cash.
As per the agreement, the total consideration could go up to an additional NIS866m ($246.64m) or decline by up to NIS196m ($55.82m), depending on the future returns of the purchasing funds.
Delek Group signed the deal with Centerbridge Partners and Gallatin Point Capital in May 2019.
Based in the UK, Centerbridge Partners is a venture capital fund, which handles $27bn of investments across the insurance, financial services, and real estate sectors. Gallatin Point Capital is a US-based private equity firm, which invests in areas that are subject to regulatory and technological change, with specialisation in financial services and assets across the world.
Delek Group undertook the sale of Phoenix Insurance in compliance with the provisions of the Israeli Market Concentration Law.
The conglomerate, which has substantial interests in natural gas fields and other energy assets in Israel, cannot have stakes in both financial and non-financial businesses, as per Israeli regulation policy, reported Reuters.
In July 2018, Delek Group terminated an agreement under which it was to divest its then stake of 52.25% in Phoenix Insurance to Bermuda-based Sirius International Insurance for $648m. However, the deal had to be cancelled after failing to secure the required regulatory approvals.
Delek Group had managed to offload small stakes in the insurance company through multiple transactions before striking a larger deal with Centerbridge Partners and Gallatin Point Capital.
Activities of Phoenix Insurance
Established in 1949, Phoenix Insurance provides a variety of insurance products in Israel, which include life, personal accident, travel and home. It was in 2006 when Delek Group acquired a controlling stake in the insurer.
The Israeli insurance firm also offers savings products, pensions, and provident and education funds apart from other services and products.