Israel’s Cellcom has signed a memorandum of understanding (MoU) with Golan Telecom to acquire the latter operator for ILS590 million (US$172 million).
With this announcement, Cellcom appears to have won out against a rival bid by Bezeq to acquire Golan Telecom for ILS710 million. Bezeq was aiming to merge the unit with its subsidiary, Pelephone.
A statement from Cellcom said that the binding MoU is “subject to certain adjustments…standard and customary conditions [and] receipt of regulatory approvals”. Cellcom will carry out due diligence and anticipates Golan Telecom’s financials to hold steady.
Cellcom has stated that the MoU is valid until 31st December this year, by which time it expects the conditions to have been satisfied in order for the deal to close. The operator will pay ILS413 million once the deal has closed, followed by a second instalment of ILS177 million within three years of this date.
Both Cellcom and Bezeq’s interest in Golan Telecom appeared to be prompted by Altice Europe subsidiary Hot Telecom making an acquisition offer to Partner Communications. The threat of a strengthened rival in the market may have spurred the consolidation strategy.
