Delek Group, the holding company controlled by Yitzhak Tshuva, said on Tuesday it had sold its controlling stake in its United States insurance business Republic Companies as its pares down its businesses to focus on gas and oil.
Delek said its sold its 66% stake in Republic for $140 million to AmTrust Financial Services after reaching an agreement on Sunday. In addition, AmTrust agreed to buy the remaining 34% of Republic, which Delek sold to a group of Texas investors 11 months ago for $75 million, for about $93 million. Shares of Delek, which will have earned 850 million shekels ($216 million) from selling Republic in two tranches, fell 1% to close at 845.40 shekels.
AmTrust, a New York-based holding group with a $5 billion market capitalization, is controlled by the Karfunkel family, who now reside in Israel and had briefly expressed an interest in acquiring Israel’s Clal Insurance.
AmTrust will pay Delek $35 million in cash for the Republic stake and the rest as a sellers’ loan payable over four years at an annual interest rate of 5.75%. Pending regulatory approval, the two sides said they expect the sale to be completed in the first half of 2016.
Delek has been divesting much of its business in real estate and finance, including Barak Capital, the Roadchef chain of British filling stations and convenience stores, and the car importer Delek Auto. It is now in the process of selling its Israeli insurance company Phoenix to China’s Fosun International for $1.8 billion.
Texas-based Republic, a century-old firm, reported total direct premiums of about $711 million last year. The majority of the business is written in the Southwestern states. In addition, Republic generates fee revenue by providing insurance services to third parties.