Generali, an Italian underwriter has inked a deal with Eliahu Insurance to dispose its 69.13% controlling stake in Migdal Insurance and Financial Holdings for €705m, which is 16% down compared to a price of €835m settled in March this year.

Under the acquisition agreement, the deal will be completed in October this year, after obtaining approval from the concerned Israeli authorities and regulatory bodies.

The new deal provides for the payment to Generali of €125.25m as a break-up fee that will be withheld definitively, if the transaction is not completed, for any reason not attributable to Generali, by the end of October, Generali said.

The deal will boost Eliahu Holdings strong position in the Israeli market, while the same will strengthen Generali’s ratio under Solvency I rules by 2.2%.

Migdal Insurance and Financial Holdings trades in the life, health, pension funds and non-life insurance segments through Migdal Insurance with a distribution network of independent agents and brokers and distribution companies.

Eliahu Insurance is part of the Eliahu Group, which is active in the financial services, insurance and real estate sectors and holds a stake of nearly 10% in Bank Leumi.