Sale of insurer Phoenix to China’s Yango called off

Israeli energy conglomerate Delek said Monday its planned sale of a controlling stake in Israeli insurer Phoenix Holdings to China’s Fujian Yango Group has been called off by both sides after it failed to secure regulatory approval.

It did not give a reason for the failure. However, the Israeli government has expressed concerns over the purchase of key financial assets such as insurers by Chinese investors, fretting over pension cash.

Delek, which holds significant stakes in Israel’s largest natural-gas fields and other energy assets, is required to sell some of its financial assets under a new regulation that prohibits large domestic conglomerates from holding both financial and nonfinancial businesses.

Delek signed a binding agreement last August to sell its 52.3% stake in Phoenix to Yango for NIS 1.97 billion ($557 million). That price was raised to NIS 2.15b. in April.

“Due to the prolonged process of obtaining the approval for the sale of control in Phoenix to Yango Group, the two sides agreed today, June 26, to cancel the agreement,” Delek said in a statement. “The company has been approached by other entities in Israel and abroad regarding the sale of its holdings in Phoenix and will continue to act to sell its holdings as required by law.”

In March last year a nonbinding agreement by Delek to sell Phoenix to a US insurer, which industry sources identified as AmTrust FinancialServices, was canceled by both sides.

Delek had previously agreed to sell its Phoenix stake to China’s Fosun International for NIS 1.8b., but the deal collapsed when conditions were not met.

The IDB Development group, another Israeli conglomerate, has also faced regulatory difficulties in its attempts to sell control of Clal Insurance to Chinese investors. (Reuters)