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Delek Group to sell 55 pct of U.S. insurer Republic for $121 mln
April 16, 2014 / 7:42 AM / 4 years ago

Delek Group to sell 55 pct of U.S. insurer Republic for $121 mln

JERUSALEM, April 16 (Reuters) - Israeli energy and insurance conglomerate Delek Group said on Wednesday it has agreed to sell a controlling 55 percent stake in its U.S. insurance business Republic Group for $121 million to a group of unnamed investors.

The deal values Dallas-based Republic at $220 million and gives the U.S.-based buyers a two-year option to purchase the remaining 45 percent, Delek said in a statement to the Tel Aviv Stock Exchange.

Republic provides personal and commercial property and casualty insurance.

The sale comes as Delek, which owns stakes in the giant Tamar and Leviathan natural gas fields off Israel’s Mediterranean coast, seeks to divest its financial holdings.

Delek said the deal still requires regulatory approval and that there was no certainty it would be completed.

Delek is separately seeking to sell its stake in Israeli insurer Phoenix to comply with new Israeli regulations that prevent conglomerates from holding significant stakes in both financial and non-financial companies.

The Republic buyers will pay half the purchase price in cash and the rest will come in a three-year loan provided by Delek Finance to the buyers, Delek said. The remaining 45 percent, according to the option, will cost $99 million, plus annual interest of 6.5 percent. (Reporting by Ari Rabinovitch)

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