Golan Telecom will be acquired by Electra Consumer Products in a deal that resolves the Israeli firm’s storied legal dispute with rival Cellcom.
Following the announcement of the acquisition, Cellcom has signed a mitigation agreement to finally bring a close to all legal action that it has filed against Golan, including a court case and a threat of liquidation proceedings. Cellcom’s dispute is based on unpaid roaming charges owed to it by Golan.
Electra Consumer Products is controlled by conglomerate Elco Holdings. After initial indications in December 2016 that the group was considering an acquisition of Golan, it has confirmed that it will buy the operator for ILS350 million ($91m).
The deal requires regulatory approval, and some of the revealed terms may raise eyebrows in this regard - in particular, a loan from Cellcom to Golan Telecom. The former, larger operator attempted an acquisition of Golan in November 2015 but its attempt was denied by the regulator.
However, if the deal goes through then Cellcom and Golan are set to form a new ten year network sharing agreement for 3G and 4G networks, as well as a 2G hosting agreement. To implement this, the firms will form a new joint venture.
“Cellcom congratulates Electra Consumer Products for purchasing Golan Telecom and entering the communications market” said Nir Sztern, Cellcom Israel CEO. “The network sharing agreement facilitates Cellcom’s continued investment in future technologies.”