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A consortium of UAE funds led by Abu Dhabi-based investment and holding company ADQ is in advanced talks to acquire a controlling stake in Israel’s largest insurer Phoenix Holdings Ltd. in a deal worth about NIS 2.3 billion ($674 million) .
Under the terms of the deal, the UAE group, led by Abu Dhabi government-backed ADQ Developmental Holdings, will buy between 25% and 30% of Phoenix from US private investment firm Centerbridge Partners and Gallatin Point Capital, which owns 33.44% of Israel’s Givatayim financial services company. The deal values ​​Phoenix at NIS 9.2 billion, slightly below its market capitalization of NIS 9.48 billion.
As part of the deal, Gallatin Point will remain part of Phoenix’s controlling core as a partner in the Abu Dhabi fund and retain its representation on the financial services company’s board of directors. Additionally, Phoenix CEO Eyal bin Simon and chairman Benny Gabe are expected to remain in their roles and buy up to 2% of the company’s stock, “expressing their confidence in the company’s future,” according to a statement.
However, the deal is still subject to regulatory approvals, including a license from the Israel Capital Markets, Insurance and Savings Authority. The Abu Dhabi fund consortium said it intended to submit an application to Israeli regulators, aware that it would be subject to a review process under the law before granting a license.
Centerbridge Partners, which manages about $36 billion in assets, and Gallatin Point Capital acquired a 32.5 percent stake in Phoenix from Itzhak Tshuva’s Delek Group in 2019 for NIS 1.72 billion. Tshuva was forced to divest the financial services firm to comply with Israeli regulatory laws that apply to large conglomerates.
On the eve of the sale, several deals for Phoenix by potential buyers, including Chinese conglomerate Fosun, fell through as Israeli regulators worried that foreign groups would take control of the company, which manages the savings of a large Israeli pension fund and the public. .
Commenting on the current transaction, Centerbridge Partners and Gallatin Point said, “The transaction represents a vote of confidence in the company, the Israeli market and the long-term potential and prospects of the industry.”
Phoenix manages NIS 364 billion in assets, including pension and provident funds, and is engaged in insurance, investment and asset management, and credit businesses.
The deal marks another sign of growing economic ties between the UAE and Israel since the signing of the US-engineered Abraham Accords. The UAE is the first signatory to the 2020 normalization agreement between the two countries.
In May, Israel and the United Arab Emirates signed a free trade agreement to boost economic ties, with trade reaching some $2.5 billion by then. Last year, the UAE announced it would set up a $10 billion investment fund targeting Israel’s strategic sectors such as energy manufacturing, water, space, healthcare and agricultural technology.
Established in partnership with the Government of Abu Dhabi in 2018, ADQ is an investment and holding company with a broad portfolio in key sectors such as energy and utilities, food and agriculture, financial services, healthcare and life sciences, and transport and logistics.
Last year, DisruptAD, the venture arm of ADQ, invest in Israel-based cultured meat manufacturer Aleph Farms, to help reinforce Abu Dhabi’s longstanding focus on food resilience. The partners said they were eyeing a manufacturing facility in Abu Dhabi to supply their cultured meat products in the UAE and the wider GCC region.
other notable trade Collaborations between the two countries over the past two years have reportedly included Abu Dhabi sovereign wealth fund Mubadala Investment Co. investing $100 in Israeli venture capital fund and startup Beewise, while Mubadala Petroleum will acquire 22% of Israel’s Tamar offshore gas deposit in 2021 The stake is about $1 billion.
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