Abraham Accords Leading To UAE-Israeli Investments


US VC firms able to exit Israeli projects with Gulf investment capital

The Abraham Accords  – a combination of peace and trade directives aimed at encouraging greater links between Israel and the Gulf States, are starting to deliver concrete results. The UAE became the first Gulf state to normalize relations with Israel under a US-brokered agreement, under the Abraham Accords, in 2020.

A consortium led by Abu Dhabi state holding firm ADQ are in advanced negotiations to acquire a controlling stake in Israeli financial firm Phoenix Group in a deal valued around 9.2 billion shekels (US$2.70 billion), the companies said on Wednesday (December 14).

US private investment firms Centerbridge Partners and Gallatin Point Capital, which hold 33.4% of Phoenix, are in talks to sell about 25 – 30% of the company to the Abu Dhabi funds for about US$$680 million , the two companies said in a statement. Phoenix’s chief executive and chairman, it said, would also buy 1-2% of the company “The transaction will be subject to regulatory approvals, which will include a control permit from Israel’s Capital Market, Insurance and Savings Authority,” Centerbridge and Gallatin said in the statement.

Some 58% of Phoenix’s shares would remain traded on the Tel Aviv Stock Exchange.

ADQ is buying Centerbridge’s stake in Phoenix, in a non-binding deal, which may take months to complete to receive regulatory and shareholder approvals, according to a source familiar with the deal. The Phoenix Group is one of the largest financial firms in Israel with a market capitalisation of around US$2.8 billion, and is a provider of multi-line insurance, asset management, investment and financial services. An investor group led by Jared Kushner tried to acquire control of this insurer several years ago for less than US$1 billion.

ADQ’s venture capital arm DisruptAD, along with a fund managed by US-French private equity firm L Catterton, in July led a US$105 million investment round in Israel’s Aleph Farms, a lab-grown meat start-up firm, another example of Israel being a center of interest for Gulf based investors looking to acquire developed businesses based on US initial seed capital financing – Gulf money allowing US primary investors to exit from Israeli based, US VC financed projects.

On a more regional basis, yet illustrating the same theme, Israeli wines are now available for purchase in Dubai liquor stores and selected bar and hotel outlets – unthinkable two years ago.

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