Jacob Shachar and Israel Kass, who import Volvos and other types of cars, have concluded a deal to acquire control of the Israeli Phoenix Assurance Company, the company announced today.
As first reported in "Globes", Shachar and Kass will buy the 56% holding of Israel Phoenix chairman and CEO Joseph (Yossi) Hackmey and his sister Nitza for $270 million. They will not buy Shlomo Eliahu's 38% stake in the company.
Shachar and Kass, who will not be able to make special decisions requiring a 75% majority without Eliahu's consent, believe they will be able to manage the company with a normal majority..
Shachar and Kass have also reached agreement with supervisor of insurance Tzippi Samet on Israel Phoenix's equity after the deal. As of September 30, 2001, the company's equity was estimated at NIS 663 million. It appears that the equity will be substantially increased as part of the deal.
Shachar and Kass plan to complete the merger in process between Israel Phoenix and Hadar, its subsidiary. It was recently agreed that the merger would take place as follows: Hadar will absorb Phoenix's insurance business. Atara, Phoenix's investment subsidiary, will absorb the investment business of both companies, including real estate and partial ownership of Mehadrin and Shagrir. The merger will increase the equity of the merged company, on top of the increased equity from the acquisition deal.
Israel Phoenix general manager Bar-Kochva Ben-Gera will continue in his position.
Shachar-Kass group sources confirmed the negotiations had been concluded, but declined to comment on the price. Eliahu declined to comment at all.
Israel Phoenix is Israel's third largest insurance company, with a 18% market share. The company had revenue of NIS 3.4 billion in January-October 2001: 51% in life insurance and 49% in non-life insurance. The company earned a NIS 189 million after-tax net profit in this period.
Published by Israel's Business Arena on January 3, 2002