Eight months after initiating negotiations to consolidate their control of Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), the Hamburger family has announced that it will buy half of the 20% holding of Indonesia's Sampoerna family in the company for NIS 300 million.
When the deal is closed, the Sampoerna Group of Companies will no longer be part of the controlling core in Harel, and will become simply a financial investor in it. The Hamburger family, through GYN Financial Consulting and Management Ltd., will have undisputed control of Israel's third largest insurance company. In just under four years after first investing in Harel, the Sampoerna Group is selling half it holding at a loss of NIS 60 million.
Closing the deal is subject to regulatory approval, which is expected after a mainly technical process. The Sampoerna Group's remaining 10.8% holding in Harel will be solely a financial holding, in contrast to its present holding, which is considered strategic.
The Sampoerna Group, one of the largest companies in Southeast Asia, initiated the negotiations as part of the restructuring of its international holdings in order to refocus on Indonesia and China and reduce investments in other countries. The Sampoerna family will therefore keep only a financial investment in Harel, and will not expand its investments in Israel. The Hamburger family has first refusal rights to the Sampoerna Group's remaining shares in Harel.
Harel's share fell 3.2% by mid-afternoon today to NIS 196.60, giving a market cap of NIS 4.18 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 24, 2010
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