February 17, 2020

Pelephone Submitted a Bid to Acquire Golan Telecom for 710 Million Shekel

GLOBES

February 17, 2020

Mergers & Acquisitions

Pelephone Submitted a Bid to Acquire Golan Telecom for 710 Million Shekel

Concurrently, Golan Telecom is holding negotiations for its sale to Cellcom for about NIS 600 million and a waiver of a loan it took from the latter • The Competition Authority may not approve Golan's acquisition by Pelephone

The race for the acquisition of Golan Telecom is stepping up, and Pelephone announced today, Sunday that it submitted a bid to acquire the company for NIS 710 million. Golan Telecom is holding negotiations for its sale to Cellcom for about NIS 600 million plus the waiver of a loan the company has taken from Cellcom in the amount of NIS 130 million.

It is believed that Pelephone is seeking to acquire Golan Telecom because it will strengthen it and turn it into the largest mobile company in the market, and also because the bid will thwart the possibility that its competitors will grow and expand significantly.

Pelephone has placed its bid even though it is estimated that the Competition Authority will not approve a deal that will allegedly strengthen the Bezeq Group’s position in the market. Golan Telecom is being wooed by Cellcom, and now also by Pelephone, because the company operates solely in the cellular market, and allegedly, its acquisition by Cellcom or Pelephone would not create vigorous opposition by the authorities to the merger.

The likelihood of a deal with Pelephone is low not only because it is questionable whether the regulator it will allow the Bezeq Group to expand, but mainly because Golan Telecom has a heavy fine of NIS 600 million which it will be required to bear if it dissolves its partnership with Cellcom.

In addition, it is important to emphasize that Pelephone is the only company in the cellular market that does not share a network with another operator in the framework of the network consolidation, such as Partner and Hot Mobile or Cellcom and Golan Telecom and Xfone. Therefore, the company must bear the very heavy costs of network expenditures, and in the wake of the 5G tender, which is about to be published soon, the significance thereof is critical.

https://www.globes.co.il/news/article.aspx?did=1001318639

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