The Antitrust Authority has approved the 018 Xfone Communications Ltd.-Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) network sharing agreement. At present, this is only a formal approval with no real significance. The approval is part of talks conducted by Xfone, controlled by Hezi Bezalel, for the acquisition of Golan Telecom Ltd. and the network sharing agreement with Cellcom is part of the deal.
Bezalel has continued with acquisition talks while efforts to renew the sale of the company are being made. The deal is therefore complex and includes the buyers' agreement to reach an understanding with Golan regarding the sale price.
The acquisition will also require reaching an agreement with Cellcom; Golan has an NIS 600 million debt to Cellcom and therefore any deal with the former will require a network sharing agreement with the latter and its authorization. A step on the way will be authorization by the Ministry of Communications, which preconditions a network sharing agreement on further investment in third and fourth generation networks.
The last clause is particularly problematic for buyers who do not come from the telecommunications market, since the Ministry of Communications cannot lessen its demands from them. Other players have threatened that if the end buyer's agreement does not satisfy the demands, they will pursue legal proceedings. The bottom line is that Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) has threatened that it will petition the High Court of Justice against the ministry, if it provides allowances which Partner itself had received when it signed the network sharing agreement with HOT Mobile Ltd..
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2016
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