TEL AVIV (Reuters) - U.S. private equity firm Warburg Pincus completed its acquisition of Israeli Bank Leumi’s credit card business on Monday and said it was bringing in three strategic partners.
Leumi, which owned 80 percent of Leumi Card, and property developer Azrieli Group, which held the rest, announced in July they had agreed to sell the business to Warburg Pincus for 2.5 billion shekels ($700 million), subject to regulatory approval. The Bank of Israel granted a permit to control the business last week.
New York-based Warburg Pincus said it was collaborating with three Israeli strategic partners: Menora Mivtachim, Clal Insurance and Allied Group. Each of the partners will hold 5 percent of the company’s shares, and Menora and Clal will increase their holdings to 10 percent each once they get regulatory approval to do so.
“The fund sees great importance in the inclusion of key Israeli partners in the investment, and therefore chose some of the leading financial entities in the Israeli market,” Warburg Pincus, which has more than $43 billion in private equity assets under management, said in a statement.
Leumi Card is expected to rebrand and change its name to Max, it said.
In a bid to increase competition, regulators have instructed Israeli’s two biggest banks, Leumi and Hapoalim, to sell off their credit card companies by early 2020. ($1 = 3.6022 shekels)
Reporting by Tova Cohen; Editing by Steven Scheer and Kevin Liffey