Electra confirms Cellcom talks to buy Golan Telecom

Zvika Schwimmer  / Photo: PR

The acquisition of Golan Telecom by Cellcom would preempt a merger between Hot and Partner.

Electra Consumer Products (TASE: ELEK) has officially confirmed that it is negotiating to sell its subsidiary, Golan Telecom, to Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). Electra Consumer Products says that at this stage, there is no certainty that a deal will result. The announcement follows a series of reports about merger talks between Cellcom and Golan Telecom.

Cellcom wants to acquire Golan Telecom in order to fortify its status as a strong communications group in the local market. Another motive is to thwart a possible merger between Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and HOT Telecommunication Systems Ltd. (TASE: HOT). Cellcom fears that the Israel Competition Authority and the Ministry of Communications will not allow any more mergers in the market if Partner and Hot merge, and therefore began intensive negotiations to complete its merger with Golan Telecom before talks between Hot and Partner make progress.

The Israel Competition Authority and the Ministry of Communications want to avoid a substantial reduction in the number of players in the market. A merger between a large player and a small one, such as a merger between Cellcom and Golan Telecom, therefore appears more acceptable for them than a merger between large players, such as Hot and Partner.

Electra Consumer Products CEO in Zvika Schwimmer

Published by Globes, Israel business news - en.globes.co.il - on February 16, 2020

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

Zvika Schwimmer  / Photo: PR
Zvika Schwimmer / Photo: PR
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