The Board of Directors of Ayalon Insurance Company authorized the company’s management to examine possible ways for collaborations with the Altshuler Shaham Group, including a possible consolidation of the provident and pension activities of both companies, Ayalon reported today (Thu). Within the framework of the outline, the possibility that Ayalon will hold a certain percentage of ownership in the consolidated entity will also be examined. The examination comes following an approach conveyed yesterday to the Ayalon Board of Directors by its controlling shareholder, wesure Global Tech. Global Tech engaged in September, together with Levinstein Yair Holdings, in an agreement to acquire controlling shares in Altshuler Shaham Financials from Altshuler Shaham Ltd. The collaborations, to the extent formulated, can only be implemented after the completion of the control acquisition transaction.
A senior official in Ayalon’s management stated that from Ayalon’s perspective, the guiding lines in the examination are clear: the name of Ayalon Insurance and Finance will be the name leading the merged provident and pension activity, and Ayalon is the one that will lead investment management and service management facing agents. “The condition from our perspective will be Ayalon’s name, dominance in management – meaning, the investment management that proved itself over time will be Ayalon’s – and Ayalon’s service standards,” said the official. According to him, Ayalon is expected to have an additional advantage from entering the move: “There is an entity here that has a pension, and that has already passed the profitability break-even point.” He explained that in order to reach profitability a mass of assets is required, and that Ayalon’s provident activity “is progressing at a very nice pace, but has not yet reached break-even, which is estimated at about 15 billion Shekels.” According to the report, Global Tech proposed to Ayalon to check whether the collaborations would allow it to benefit from economies of scale, expand distribution and service capabilities, gain access to professional capabilities and existing systems, expand or accelerate its activity in the provident field – and enter the pension field, in which it currently does not operate. The current approach is Global Tech’s second to Ayalon regarding Altshuler. At the beginning of September, Global Tech proposed to Ayalon to examine whether to step into its shoes in the deal to acquire the control core in Altshuler, but Ayalon replied that it has a regulatory impediment to executing the transaction under the proposed outline. A few days later, on September 14, Global Tech announced the signing of the acquisition agreement together with Levinstein. Ayalon’s management will lead the examination accompanied by the Chairman of the Board of Directors and under the supervision of the Audit Committee, and its results will be brought to the Board of Directors. Due to the personal interest of Global Tech and its controlling shareholders – as the controlling shareholder in Ayalon and as the expected acquirer of control in Altshuler – any outline that is formulated will be subject to the required approval procedures according to law. Ayalon emphasized that there is no certainty that the move will materialize, and that it depends, among other things, on the results of the examination, on agreements with the parties, on receiving corporate and regulatory approvals, and on completing the acquisition agreement.
