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Israel’s largest insurer is changing hands, with Abu Dhabi Development Holdings (ADQ) agreeing to buy a 25 percent stake in Phoenix Insurance Company from U.S. funds Centerbridge and Gallatin Point Capital for NIS 2.3 billion ($680 million). shares.
As part of the deal, Phoenix executives, led by chief executive Eyal Ben Simon and chairman Benny Gabbay, will buy a 2 percent stake in the company while committing to stay with the company for the next five years. Centerbridge and Gallatin Point Capital will retain a 6 percent stake in Phoenix.
Phoenix was valued at NIS 9.2 billion ($2.7 billion) in the deal, slightly below its market capitalization of NIS 9.5 billion.
After months of negotiations, the two sides signed a memorandum of understanding (MoU) on Tuesday. The deal still needs regulatory approval, mainly from Israel’s capital markets authority, insurance and savings ministries. The process can take several months and requires approval from the Israel Competition Authority.
Phoenix manages NIS 364 billion ($107 billion) in assets, mostly public savings. The regulatory process is expected to be rigorous, but ADQ has a good chance of being approved. Last year, Abu Dhabi’s government-owned Mubadala Petroleum received approval to acquire a 22 percent stake in the Tamar offshore gas field from Delek Drilling Limited Partnership.
ADQ became the new owner of state-owned airline Etihad Airways earlier this year, and its assets under management have grown to $157 billion. ADQ, the smallest of Abu Dhabi’s three sovereign wealth funds, has become one of the most active dealmakers in the region. ADQ was established in 2018 as a holding company for government assets and has been integrating its portfolio, privatizing some assets and making strategic acquisitions to build companies that become local or regional industry leaders.
Reuters contributed to this report
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