Israeli energy conglomerate Delek Group’s 2.2bn shekel ($610mn) sale of its 52.3 percent stake in Israeli insurer Phoenix Holdings to China’s Yango Group has been dropped by both parties after failing to secure regulatory approval.
In statement issued earlier this week (26 June), Delek said that two sides had agreed to cancel their agreement and waive their right to claim losses from the process “in view of prolongation of the proceeding for receipt of approval to transfer control in The Phoenix to Yan
“The Company has received new inquiries from both Israeli and foreign entities in connection with sale of The Phoenix's holdings, and will continue to work to sell its holdings as required by law,” it added.
Last August, Delek signed a binding agreement to sell its 52.3 percent stake in Phoenix to Yango for 1.97 billion shekels ($557mn), which was later raised to 2.2bn shekels ($610mn) in April.
The group has been forced to sell its stake in the insurer due to an Israeli regulation that prohibits large domestic conglomerates from holding both financial and non-financial businesses.
The latest failure marks Delek’s third abortive attempt to sell Phoenix.
The group had initially agreed to sell its stake in the insurer to Chinese conglomerate Fosun in December 2015 for 1.8bn shekels, but the transaction fell through in February 2016 after conditions weren’t met.
Shortly after, Delek announced that it has signed a non-binding letter of intent with an unnamed US insurer, which was reported to be AmTrust.
However, the letter was then cancelled by mutual consent at the beginning of March 2016.