A foreign investor has joined the controlling interest in Harel Insurance Investments Ltd. (TASE: HARL), Israel’s third largest insurance company. The Sampoerna Group of Companies is owned by Indonesia’s Sampoerna family, which is of Chinese extraction, and which was recently ranked by Forbes among the15 wealthiest families in South-East Asia.
The Sampoerna Group will initially acquire 20.2% of Harel through a Singapore subsidiary. When the deal is closed, the Hamburger family will own 40% of Harel, and the Sampoerna Group will own 26%.
The Sampoerna Group will buy 10.1% of Harel shares held by Israel Discount Bank (TASE: DSCT), and 10.1% owned by Hamburger family company GYN Ltd., at a company value of $900 million for Harel, 2% below its market cap at yesterday close on the Tel Aviv Stock Exchange (TASE). The cost of the acquisition will be NIS 1 billion. In addition, Discount Bank received a put option for the sale of its remaining 5.8% stake in Harel in one year to the Sampoerna Group and the Hamburger family in equal shares.
Harel Group chairman Yair Hamburger said “We are delighted to have the Sampoerna Group on board at the Harel Group, and are convinced that this is the beginning of a long-term and fruitful cooperation. We believe that a combination of the experienced management of the Harel Group with the added value of the Sampoerna Group in the international markets will contribute to expand Harel Group’s activities outside of Israel in general and in Asia in particular.
" We want to thank Discount Bank for the strong partnership and loyalty they showed to the Harel Group in recent years, and hope we will continue collaborating going forward”.
The connection between the Sampoerna family and Israel was made by its Business Director, Ariel Kor, and its representative in Israel, Gabby Perel. At the completion of the transaction the Sampoerna family will propose to appoint Kor and Perel to the Harel board of directors. Perel will become vice chairman of the Harel Group.
Published by Globes [online], Israel business news - www.globes.co.il - on May 29, 2006
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