Electra Consumer Products is to acquire Golan Telecom, in a move that also ends the troubled Israeli operator’s long-running dispute with former suitor Cellcom.
As the deal was announced, Cellcom signed a mitigation agreement to end a long-running dispute on unpaid roaming charges, which have previously led to a court case and the threat of liquidation proceedings against Golan Telecom. The companies are also set to ink a network sharing agreement when the new ownership deal completes.
Electra Consumer Products, owned by conglomerate Elco Holdings, announced its bid to acquire Golan for ILS350 million ($91m) earlier today, following speculation in early December that the company was in talks to purchase the operator.
According to local publication Globes, some terms of the deal (such as a loan from Cellcom to Golan Telecom) may spark interest from regulators, which previously blocked Cellcom’s own attempts to buy Golan Telecom in November 2015.
Should the acquisition be approved, Cellcom will enter into a 10 year 3G and 4G network sharing deal with the company, in addition to a 2G hosting arrangement. A new joint venture company will be created.
Cellcom estimates it will receive an annual pre-tax payment of ILS210 million-ILS220 million from Golan for network sharing and hosting, dependent on subscriber numbers and network usage.
Nir Sztern, Cellcom Israel CEO, said: “Cellcom congratulates Electra Consumer Products for purchasing Golan Telecom and entering the communications market. The network sharing agreement facilitates Cellcom’s continued investment in future technologies.”