Delek Group is set to divest its remaining stake of 32.5% in Israeli insurance company Phoenix Insurance to companies controlled by Centerbridge Partners and Gallatin Point Capital for about NIS1.72bn (£380m).
As per the binding agreement signed by the parties, the firms controlled by Centerbridge Partners and Gallatin Point Capital will initially acquire a controlling stake of nearly 30% in Phoenix Insurance for an overall amount of NIS1.6bn (£350m).
Delek Group in the agreement committed to help the buyers to acquire an additional stake of around 2.5% in the Israeli insurance company by the year end for an additional amount of NIS120m (£26.26m).
The completion of the agreement will be subject to meeting of contingent conditions like receipt of approvals for the transfer of control, non-occurrence of a material adverse event (MAE) in the insurance company’s business from additional regulatory bodies, and completion of certain financing arrangements.
The conglomerate, in a statement, said: “Soon after complete fulfillment of all the contingent terms the Agreement will be completed, and in any event the period set for its closing is at the latest half a year from date of signature, and is conditional on the progress made in receiving the required permits.”
Founded in 1949, Phoenix Insurance offers a range of insurance products in Israel that include life, personal accident, home and travel.
The Israeli insurance company also provides savings products, pensions, and provident and education funds along with other services and products.
In February, Delek Group revealed that it had entered into advanced negotiations to sell its stake in the insurance company without disclosing the names of the buyers.
The conglomerate has been selling small stakes in Phoenix Insurance in the recent times through various transactions.
Delek Group, which has significant interests in natural gas fields and other energy assets in Israel, cannot continue to hold stakes in both financial and non-financial businesses, as per Israeli regulation policy, reported Reuters. As a result, the conglomerate has been pursuing to quit the Israeli insurance business for quite some time.
Last July, Delek Group scrapped an agreement under which it was to offload its then stake of 52.25% in Phoenix Insurance to Bermuda-based Sirius International Insurance for $648m (£511m). The transaction had to be canceled after not getting the required regulatory approvals.