Bezeq to gain control of YES
DetailsRebecca Hawkes | 13 February 2015
Israeli telecommunications firm Bezeq is to take full control of satellite TV operator YES in a long anticipated deal worth up to ILS1.05 billion (US$271 million).
Through the acquisition of the controlling 50.2% stake in YES, Bezeq will be able to package TV, phone and Internet services and compete with its biggest rival, cable operator HOT, which already offers triple-play services.
"This is a strategic transaction for Bezeq that will turn it into the complete communications group," said Stella Handler, CEO, Bezeq.
Bezeq will buy the remaining stake from Eurocom, a company controlled by Shaul and Yosef Elovitch. Eurocom also holds shares in Bezeq. Bezeq will pay ILS680 million in cash for the shares and ILS1.54 billion in loans provided by Eurocom to the satellite operator YES.
Eurocom will be entitled to two additional contingent payments. The first, for up to ILS200 million, will be based on tax synergies and the second, for up to ILS170 million, will be based on YES's business results over the next three years.
Israel's antitrust commissioner gave its permission for Bezeq to merge with YES in 2014, however the deal must receive approval from the Communications Ministry and minority shareholders.
The Communications Ministry is in the process of creating a wholesale telecoms market that will allow other companies to use Yes and Hot's infrastructure. In approving the Bezeq/YES merger last year, the antitrust commission said Bezeq would first have to pave the way for other firms to compete in the market for television broadcast services.