The shareholders of mobile carrier Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and telephony, ISP, and international calls carrier NetVision Ltd. (TASE: NTSN) have approved the merger of the two companies, both of which are controlled by Nochi Dankner through IDB Holding Corp. Ltd. (TASE:IDBH).
All NetVision shareholders who were not a party at interest in the deal voted in favor of it, as did 98% of disinterested Cellcom shareholders. The Ministry of Communications has also approved it.
Cellcom will acquire NetVision for NIS 1.54 billion in cash. Cellcom CEO Amos Shapiro will head the merged company, while NetVision CEO Nir Stern will organize the move, which will create a complete telecommunications group. Until the final structure of the merged company is decided upon, NetVision and its staff will continue business as usual.
In a letter to Cellcom and NetVision managers, Shapiro said, "Creating better competitiveness and growth is the merger's primary objective. The merger of two organizations of the size of Cellcom and NetVision is complicated, as it involves companies whose employees are people with desires, aspirations, and understandable fears, whom we must take into account every hour of every day."
IDB holding companies Discount Investment Corporation (TASE: DISI) and Clal Industries and Investments Ltd. (TASE: CII) will report pretax capital gains of NIS 71 million and NIS 87 million respectively on the deal.
Cellcom's share price closed at $26.42 in New York yesterday, giving a market cap of $2.62 billion. Its share price fell 1.1% by mid-afternoon on the TASE today to NIS 89.70, but NetVision's share price rose 0.9% to NIS 47.67, giving a market cap of NIS 1.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2011
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