Direct Insurance - Financial Investments Ltd. (TASE: DIFI) seeks to merge subsidiary Yashir Investment House Ltd. with recently merged Meitav Investment House Ltd. In a notice to the TASE, Direct Insurance said that there was no assurance of a deal.
The merger of Yashir and Meitav, if carried out, will be in the form of a share swap on the basis of the ratio of assets under management of the two investment houses, including the assumption of debts. Direct Insurance will reportedly receive 30-35% of the merged investment house.
The goal of the proposed merger is to achieve economies of scale, and if the merger is not consummated, both Yashir and Meitav will seek to merge with other investment houses.
Yashir chairman Ariel Landau said, "This is a merger, not a sale. We'll stay in the capital market. We concluded several years ago that in order to stay in the capital market, a critical mass of NIS 20 billion and a diversity of activities were necessary, both during times of growth and of contraction. If this deal does not go through, we'll continue, as we've done in the past year, to seek ways to increase our assets and to properly balance our activities. These ways include acquisitions, mergers, and in-house growth."
If Yashir and Meitav merge, the combined investment house will become one of Israel's largest, with NIS 23 billion in assets under management. This would include NIS 5 billion in mutual funds, amounting to a 4.8% share of the market as of March 2009, making it the eighth largest mutual funds management company. The merged company would also have NIS 10 billion in provident funds, making it the seventh largest company in this sector, and it would also have NIS 5.5-6 billion in portfolio management. Both investment houses also have brokerage activities, exchange traded funds (ETFs) with an aggregate value of NIS 2.7 billion, pension funds, and online trading services.
The merger in March between Meitav and B. Gaon Holdings Ltd. (TASE: GAON) subsidiary Gaon Investment House was the first full consolidation in the local investment house sector.
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2009
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