Generation Acquires Shikun & Binui Energy for 4.45 Billion Shekels After Regulatory Preparations

Shikun & Binui, led by Amit Birman, has finalized an agreement to sell its energy division, Shikun & Binui Energy, to the Generation fund for 4.45 billion shekels. The deal follows weeks of negotiations and about two months after signing a memorandum of understanding. Discussions focused on the final price, completion of due diligence, and penalties if regulators block the deal or if Shikun & Binui accepts a competing offer. The acquisition will be executed through a reverse triangular merger via PowerGen, Generation's subsidiary managed by Dan Kleinberger.

The final payment includes 4.3 billion shekels plus 150 million shekels for the time elapsed since the memorandum, slightly below the maximum 4.5 billion shekels initially proposed but without a conditional payment component. Generation plans to fund the purchase mainly with already raised capital, including a one-billion-shekel equity issuance completed two months ago with leading institutional investors, 800 million shekels in fund reserves, and additional investors joining the merged company.

Generation agreed to pay a 300 million shekel penalty if regulatory conditions prevent deal completion, while Shikun & Binui would pay a similar amount if it opts for a rival bid. The main regulatory hurdle remains approval from the Electricity Authority and the Antitrust Authority. Generation has begun steps to meet these requirements, including asset swaps with RFP Energy involving the Raindear and Alon Tavor power stations, and a deal with Nofar Energy.

The competing bid from Keystone, led by Dr. Navot Bar, offered 4.35 billion shekels without conditional payments and claimed it could better meet regulatory demands. However, after Generation's agreement, any new Keystone offer must reach at least 4.75 billion shekels, including penalties. Keystone's larger market share and leveraged financing raised concerns among institutional investors, especially since it proposed no due diligence.

Generation expects the acquisition to accelerate profitability for Shikun & Binui Energy's renewable projects and support national supply reform goals by reducing consumer costs. The company remains open to further measures to secure regulatory approvals and enhance competition in the electricity market.