Israel's Private Electricity Market Sees First Merger
Translated & summarized from Al-Shams by baba
Super Power has acquired Pazgaz Energy's residential electricity supply business in Israel's first private electricity market merger, expected to add 130 million shekels annually to revenue. The deal, valued at 23-25 million shekels, consolidates the market to six companies, with Super Power offering a 6.5% discount. Despite challenges in profitability for private suppliers, the merger is seen as beneficial for consumers, and further consolidation is anticipated.
The story in 6 lines · by baba
- Super Power acquired Pazgaz Energy's residential electricity supply operations in Israel's first private electricity market merger.
- The deal is valued at 23-25 million shekels and is expected to add 130 million shekels annually to Super Power's revenue.
- The merger reduces the number of private electricity suppliers in Israel from seven to six companies.
- Super Power currently offers consumers a 6.5% fixed discount on electricity, the highest available.
- The private electricity market faces profitability challenges, leading to expectations of further consolidation.
- Approximately 450,000 households have switched from the state-owned Israel Electric Corporation to private providers.
Israel's private electricity market has experienced its first-ever merger, with Super Power acquiring the residential electricity supply operations of Pazgaz Energy. The deal, announced Thursday on the Tel Aviv Stock Exchange, is projected to add approximately 130 million shekels annually to Super Power's revenue. Super Power is controlled by Supergas Power, part of the Electra Group, in partnership with solar energy firm Enlight. The acquisition includes an initial payment of 15 million shekels and an additional 8 to 10 million shekels tied to customer base transfer, bringing the total deal value to between 23 and 25 million shekels. According to Globes, the purchase price is less than one-fifth of the expected annual revenue increase, possibly reflecting the challenges private electricity suppliers face in achieving profitability. Supergas Power reported an operating loss of about 1 million shekels in the first half of 2026, compared to a 1.3 million shekel loss in the same period last year, based on EBITDA.
Private electricity suppliers act as intermediaries between low-cost electricity producers, particularly from renewable sources, and households that receive discounts on their bills. These discounts typically range from 5% to 7%, with potential for higher savings during off-peak hours. Approximately 450,000 households have switched from the state-owned Israel Electric Corporation to private providers, a trend encouraged by the Ministry of Energy. Following the merger, the number of companies in the market decreases from seven to six, consolidating into three major players: Bezeq Energy, Cellcom Energy, and Super Power, alongside smaller firms Amisragas Energy, Hot Energy, and Partner Power.
The difficulty in achieving profits is linked to the limited amount of low-cost electricity companies can purchase and resell. The Electricity Authority currently permits renewable energy producers, especially solar, to sell their output to these companies. The availability of electricity sources is expected to expand as subsidies for rooftop solar panel installations are reduced, with future discussions planned regarding electricity generated from gas-powered plants. Globes notes that the current market benefits consumers, with Super Power offering a 6.5% fixed discount, the highest among available fixed discounts. The published data does not indicate an immediate change in prices or discounts due to the merger, as consumer costs remain tied to their subscription terms. Investment analyst Lior Vider anticipates further consolidation in the sector, suggesting smaller companies may become acquisition targets as firms seek to expand their customer base and achieve cost savings.
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