Israel's IDB agrees to sell Clal Insurance stake to Huabang Financial

Hunlicar

05/09/2017 10:57

JERUSALEM, Sept 5 (Reuters) - Israeli holding company IDB 
Development Corp signed a memorandum of understanding to sell 
its 44.9 percent stake in unit Clal Insurance  CLIS.TA  to Hong 
Kong-based Huabang Financial Holdings  3638.HK , the companies 
said on Tuesday. 
    The non-binding deal values Clal, one of Israel's largest 
insurers, at 4.88 billion shekels ($1.4 billion). IDB's stake of 
24.89 million shekels -- is worth 1.35 billion shekels, while 
another 45.6 percent of Clal, which has assets of above 100 
billion shekels, is traded on the Tel Aviv Stock Exchange. 
    Bank Hapoalim  POLI.TA , Israel's largest lender, owns 9.5 
percent of Clal Insurance. 
    DB is required to sell its stake in Clal to abide by Israeli 
regulatory requirements that prohibit holding companies from 
owning both financial and non-financial businesses. 
    Huabang's move follows two failed attempts by IDB to sell 
its stake in Clal to Chinese investors. 
    In July, IDB said that an overseas group had made an offer 
for its Clal Insurance stake but it did not identify the 
potential buyer. Clal has a market value of 3 billion shekels. 
    Huabang said the proposed acquisition, which is subject to 
regulatory approvals, will enable it "to diversify its business 
scope and further broaden its source of income." 
    IDB's controlling shareholder, Argentinian businessman 
Eduardo Elsztain, said in September he had hired JPMorgan to 
find a buyer for Clal Insurance.  urn:newsml:reuters.com:*:nL8N1BJ29I 
    The Israeli government has been reluctant to approve the 
purchase of major financial assets such as insurers by Chinese 
investors, fretting over pension cash. 
    Another Israeli conglomerate, Delek Group  DLEKG.TA , has 
also run into difficulties selling its controlling stake in 
insurer Phoenix Holdings  PHOE1.TA . 
    ($1 = 3.5756 shekels) 
 
 (Reporting by Steven Scheer, editing by Louise Heavens) 
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters 
Messaging: steven.scheer.thomsonreuters.com@reuters.net; 
Twitter: @StevenMScheer)) 
 
Keywords: CLAL INSURANCE M&A/HUABANG FIN