The sale of Israel’s Phoenix to an Abu Dhabi-led consortium fell through. Announced in December 2022, the deal would have seen Centerbridge Partners and Gallatin Point Capital sell a 25%-30% stake in Phoenix for $674 million. The deal was terminated on July 23, 2023, due to regulatory restrictions.
Israel’s Capital Market, Insurance, and Savings Authority (CMISA) imposed the regulatory restrictions. CMISA feared that the sale would grant too much influence to the foreign entity over the Israeli financial system. To proceed, the consortium needed to guarantee a five-year hold on their stake, which they refused.
The termination is a setback for Phoenix and ADQ. As Israel’s largest insurer, Phoenix’s control would have given ADQ significant influence in Israel. ADQ is a sovereign wealth fund investing for the Abu Dhabi government, with a strong presence in the Middle East. The failed acquisition is its first major investment attempt in Israel.
Centerbridge Partners and Gallatin Point Capital also face setbacks. They aimed for a 150% profit by selling their stake in Phoenix, which is now uncertain. They might need to hold the stake or sell at a lower price.
The termination highlights the challenges for foreign investors acquiring Israeli companies. The government prioritizes protecting key sectors of the economy through regulatory restrictions. Foreign investors must navigate such hurdles when seeking control in Israeli businesses.
