Delek Group Off-loading Overseas Assets

Yitzhak Tshuva's holding company sells control of U.S. insurer, trying to relinquish its Delek Europe subsidiary

Emil Salman

Delek Group said on Wednesday it had reached an agreement to sell control of its Republic Companies insurance unit in the United States.

Delek, the holding company controlled by Yitzhak Tshuva, is also in talks to sell its Delek Europe subsidiary, which operates filling stations and convenience stores in Belgium, the Netherlands and France, to the British buyout fund TDR Capital, TheMarker has learned

Delek said it would sell 55% of the Dallas-based insurer for $121 million to a group of private U.S. investors, giving them an option to acquire the rest of Republic anytime over the next two years for an additional $99 million. Delek will be paid the $121 million half in cash and half in the form of a loan provided by Delek itself.

Meanwhile, the sale of Delek Europe values the company at between 650 million and 750 million euros ($898 million and $1.04 billion). But TDR would also be taking on some 400 million euro of Delek Europe debt, meaning Delek will get between 300 million and 400 million euros cash out of the sale.

That amounts to a nil return on its investment in Delek Europe in the seven years since it acquired the company. Delek closed 1.4% higher at 1,418 shekels ($408) on the Tel Aviv Stock Exchange Wednesday.