Gilat and ECI again in merger talks

Talks on the sale of control in Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) have been revived. The company is negotiating a merger with telecommunications equipment company ECI. ECI is controlled by Swarth Group, an investment vehicle controlled by Shaul Shani.

If a deal materializes, it will be through a share swap reflecting a value of $900 million to $1 billion for the merged company.

ECI and Gilat both declined to comment. In any event, completion of the transaction, if it goes ahead, is not expected anytime soon.

Talks between Gilat, which is 20% owned by York Capital, and ECI are not something new. In the late 1990s, a link-up between the two companies was on the agenda, but in the end it did not happen. Following the acquisition of ECI by the Swarth Group at the end of 2007, a merger was discussed more than once, and possibly the current talks are a continuation of the negotiations conducted with Gilat's shareholders in the past.

Published by Globes [online], Israel business news - www.globes-online.com - on October 3, 2010