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012 Smile Buys Third of Israel's Bezeq
Israel's 012 Smile Communications is buying nearly a third of the dominant local telecoms operator, Bezeq for NIS 6.5 billion (US$1.76 billion). 012 Smile is buying the 30.6% stake from Ap.Sb.Ar. Holdings.
Eli Holtzman, Chief Executive Officer of Internet Gold, which owns 75% of 012 Smile, said: "For the past two years, we have been searching for the right accretive investment which will upgrade our group to the forefront of the Israeli Communication market. I trust that this investment will solidify Internet Gold's position as Israel's largest communications group while creating significant value to our shareholders."
Stella Handler, Chief Executive Officer of 012 Smile, said: "This transaction is in line with our strategy to become, through selective investments, the leading integrated player in Israel's telecom marketplace. Given its unique competitive positioning and strong cash flow generation, Bezeq represents an attractive investment for 012 Smile."
As the largest telecom operator in Israel, Bezeq provides wired and wireless telephone and other communications services to consumer and business subscribers throughout Israel. Bezeq, which has over 2.5 million access lines and about 1 million broadband ASL lines, also provides mobile services through its cellular phone subsidiary, Pelephone Communications, to approximately 2.7 million accounts. Bezeq serves approximately 560,000 satellite television viewers with its YES brand through its DBS Satellite subsidiary. Additionally, Bezeq International is an ISP and data service provider and an international long distance service provider in Israel.
The transaction will be financed through a combination of cash, debt and stock. 012 Smile has agreed to sell its current telecommunications assets in order to obtain anti-trust approval, which proceeds will also be used to finance the transaction. 012 Smile will announce the composition of its financing package in the near future.
012 Smile expects that the transaction will close in approximately six months, subject to receipt of all requisite regulatory approvals.
Posted to the site on 26th October 2009