ADQ is buying a controlling stake in Israel’s biggest insurance company from US funds Centerbridge and Gallatin Point.
Abu Dhabi Development Holding Co. (ADQ) is set to buy control of Israel’s largest insurance company Israel Phoenix Assurance Ltd. (TASE:PHOE1; PHOE5). ADQ has signed a memorandum of understanding (MoU) with two US funds Centerbridge and Gallatin Point Capital to buy 25%-30% of the Phoenix. The deal gives Phoenix a valuation of NIS 9.2 billion, just below its current market cap of NIS 9.5 billion.
Both Phoenix CEO Eyal Ben Simon and chairman Benny Gabbay are part of the deal being put together. The pair will buy a 2% stake in the company that they have led for the past three years. As part of the agreement, they have committed to remain in their roles for the next five years. Centerbridge and Gallatin are likely to retain a 6% stake in the Phoenix and remain part of the controlling core, with a representative on the board of directors.
Centerbridge and Gallatin bought control of Phoenix in 2019 from Delek Group, controlled by Yitzhak Tshuva. The two funds bought a 32.5% stake in Phoenix for NIS 1.6 billion. Phoenix also includes a range of companies such as the Excellence Investment House and Gama Management & Clearing. Since 2019 Phoenix has almost double in value so that Centerbridge and Gallatin will record handsome gains on their investment.
The deal is subject to regulatory approval by Israel’s Supervisor of Capital Markets, Insurance and Savings.
In February 2022, “Globes” reported that UAE Crown Price Mohamed bin Zayed was moving forward on his promise in 2020 to then Prime Minister Benjamin Netanyahu to invest $10 billion in private Israeli companies. Earlier this year UAE’s Mubadalah Fund bought Delek Drilling’s 22% stake in the Tamar offshore gas field for nearly $1.1 billion.
Published by Globes, Israel business news – en.globes.co.il – on December 13, 2022.
Eyal Ben Simon credit: PR Inbal Marmary