Cellcom signs binding agreement to buy Golan Telecom

Gil Sharon and Avi Gabbay

The merger will make Cellcom, Israel's largest mobile phone operator with 3.4 million subscribers.

Israeli mobile phone operator Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) has announced that it has signed a binding memorandum of understanding (MOU) for the purchase of rival Golan Telecom's entire share capital, for NIS 590 million, subject to certain adjustments. Cellcom will pay NIS 413 million upon completion of the deal and a further NIS 177 million within 3 years from completion.

No mention was made in the announcement of the NIS 130 million that Golan owes Cellcom for the use of its network and it must be assumed that this debt is wiped off, bringing the total amount of the deal to NIS 720 million.

The merger will make Cellcom Israel's largest mobile phone operator with 3.4 million subscribers.

The merger is subject to approval by the Israel Competition Authority and the Ministry of Communications. Market sources believe that the authorities will approve this merger but not the proposed bid by Hot to buy Partner. Meanwhile, Hot has asked the Israel Competition Authority to consider its merger with Partner at the same time as the Cellcom - Golan Telecom deal.

Cellcom CEO is Avi Gabbay and Golan Telecom CEO is Gil Sharon.

Golan Telecom was acquired two years ago by Electra Consumer Products (TASE: ELEK) for NIS 350 million.

Published by Globes, Israel business news - en.globes.co.il - on February 19, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Gil Sharon and Avi Gabbay
Gil Sharon and Avi Gabbay
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