Bank Leumi on Wednesday agreed to lend insurance magnate Shlomo Eliahu up to NIS 2 billion to help finance his purchase of a controlling stake in Migdal Insurance.
Generali, Europe's No.3 insurer, is selling a 69.1% stake in Migdal, one of Israel's biggest insurance groups, to Eliahu for $1.1 billion.
Eliahu has been working on clearing a series of funding and regulatory hurdles on his way to consummating the deal.
A month ago Eliahu and Leumi reached an agreement in principle regarding the financing.
On Sunday Harel Insurance Investments agreed to buy the life and health insurance activities of his company Eliahu Insurance for NIS 210 million.
Eliahu is also the largest shareholder in Leumi, Israel's biggest bank in terms of assets, with a 9.6% stake. In addition, Leumi itself owns 9.8% of Migdal while the remaining 21% is traded on the Tel Aviv Stock Exchange.
Shares in Migdal closed 1.9% higher at NIS 3.89 TASE trading yesterday.
The Italian insurance group Generali had been among Migdal's founders before the establishment of the state.