A significant change in the activities of the agencies of the phoenix , the largest insurance group in Israel. The group reached an agreement with the founder and joint CEO of the large insurance agency Agam Leaders, Itzik Oz, who will replace the shares of the insurance agency he owns (about 30%) with the shares of Phoenix Agencies and become a partner of the Phoenix Group in the agencies arm, in which he will serve as active chairman.
The Phoenix will actually merge into it Agam Leader Holdings, the parent company of the agency Agam Leader Israel, where the insurance and finance activities are carried out, while the latter will continue to operate as an independent agency under the Phoenix Agencies.
According to the agreement between the parties, Oz will own about 17% of the shares of Phoenix Agencies, which also include Shekel (100%) and Oren Mizrah (about 70%). Oz’s partner in the management of Leader Lake, Moshe Sasson, will hold about 3% of the shares of Phoenix Agencies through the company Yahag Sasson.
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The move is being carried out as part of the implementation of the Phoenix Group’s strategy in the agency arm, which is intended to accelerate the group’s activity in the field, and marks a trend that may include further developments in the field in the near future.
Oz founded the settlement agency Agam and has served as joint CEO together with Moshe Sasson since 1992. In his role, Oz led Agam to become the leading pension settlement agency in Israel with a broad scope of activity of 200,000 active clients.
Oz is now merging all the shares of the agency he owns into Phoenix Agencies, and will lead the strategy of this arm in the insurance group.
As part of the new agreement between the parties, Oz – which in recent years has led the annual earnings table in Phoenix with an annual compensation in 2021 in the amount of approximately NIS 8.5 million (more than twice the compensation of CEO Eyal Ben Simon and chairman Benny Gabbai) – extended from two years to four Renew his contract with the Phoenix.
Oz himself stated upon signing the agreement that “this is an expression of confidence in the Phoenix Group and the Phoenix Agencies Company.”
New options agreement
This is an option agreement between the parties that was amended in December 2019, according to which the Phoenix will be able to purchase Oz’s holdings in Agam Leaders (through the Hageoz company he owns) until the beginning of January 2025, when the price floor for all the shares owned by Hageoz at the time the option is exercised will be according to the company’s value (of Agam Holdings ) of NIS 350 million. This is with the addition of interest at the rate of 2% starting in October 2019 on the additional amounts (additional amounts to be paid to Oz in the event of the exercise of an option in accordance with previous agreements between the parties) and the extension of Oz’s non-competition commitment period.
As part of the new agreement with the Phoenix, the existing agreement will be replaced by a new options agreement, according to which the parties will have options with respect to the shares of the Phoenix agencies that will be held by Hageuz and Yahag Sassoon following the merger (instead of with respect to their shares in Agam Ahezkot). The calculation of the consideration following the exercise of any of the options will be done according to a valuation that will be performed for Phoenix Agencies and in accordance with various agreements in connection with the valuation.
The change that is now being made in front of Oz is similar to the move they made in Phoenix with Kesem which was acquired and merged into Excellence, the investment house of Phoenix. As part of the same move, Phoenix announced the appointments of Avner Haddad as CEO and Boaz Nagar as Chairman of the Board, in addition to their positions as CEO and Chairman of Kesem. The two received full responsibility for all activities in Excellence while converting their holdings in Magic to holdings in the investment house.
The insurance group explained that the partnership between Phoenix and Oz is a direct continuation of the steps the group is taking to improve its assets. “This move is a direct continuation of the strengthening of the administrative infrastructure throughout the group while focusing on the implementation of the strategic goals. The entry of Oz as the chairman of the agencies is intended to support these goals while maximally preserving the independent structure of each of the agencies,” explained the Phoenix.
The CEO of Phoenix, Eyal Ben Simon, said after the signing of the agreement that “The Phoenix Agencies is a significant arm of Phoenix Holdings, and therefore we have set ambitious goals for growth and profitability. I believe, from my long acquaintance with Itzik Oz and his work, that with his help and thanks to our excellent partners and managers at the agencies, we will be able to To meet these goals and even exceed them.”
Completion of the merger is subject to the existence (cumulative) of conditional conditions, including approval by the tax authorities that the merger is exempt from tax, additional regulatory approvals as required and receipt of a merger certificate from the Companies Registry.
The Phoenix is currently in the process of selling its control from the two American investment funds Centerbridge and Gallatin Point to the ADQ investment fund controlled by the government of Abu Dhabi. According to the agreement between the funds, ADQ will acquire approximately 25% of the Phoenix shares in exchange for approximately NIS 2.3 billion, giving the insurance group a value of NIS 9.2 billion. According to the agreement, Gallatin is expected to hold about 6% of the shares and remain in the core of control, while CEO Ben Simon, chairman Gabbay and a group of managers will purchase up to 2% of Phoenix.