Cellcom Israel has announced the conclusion of the purchase of former rival operator Golan Telecom.
The purchase follows an approval process that involved the Competition Authority and the Ministry of Communications (MOC). The parties concluded the purchase of Golan's entire share capital, based on a memorandum of understanding, subject to certain modifications, for what is described as “a total sum of approximately NIS 545 million (about $162 million) plus an amount equal to the cash and cash equivalents of Golan as of the closing date and minus any financial indebtedness, which were paid in full by the company to Golan’s shareholders in cash”.
As expected, Golan’s MNO license has been replaced with an MVNO license for an interim period; Golan has also deposited a bank guarantee with the MOC for around NIS 75 million ($22.2 million). This relates, apparently, to an MOC demand that Golan will return certain monetary benefits previously received from the MOC. Golan disputes this.
Notwithstanding the MVNO status of Golan, this merged company will have some clout in a very competitive mobile market, combining the forces of two operators with a total of around 3.6 million subscribers and drawing well ahead of number two operator Partner, which is now about one million subscribers behind.