Tuesday, September 27, 2016

What's Next For China-Israel Investments?

Shlomo Freund


The story that runs in Israel every few weeks now is “The Chinese are coming” — and it comes in a few different contexts.
The most prominent stories of the last few years were a few mega deals in the Israeli market of Chinese companies buying Israeli companies. One of the most famous ones happened in May 2014 when China’s Bright Food Group bought the most popular dairy called Tnuva, a company that for many Israelis symbolizes the country itself.
There were a lot of debates if a national symbol such as Tnuva should really be sold to a foreign entity, especially a Chinese one. What people in Israel forgot is that the majority of Tnuva stocks was sold in 2008 to Apax Partners, which is a British fund active in Israel since 1984. Back then there wasn’t such a fuss around the deal.
Another publicized deal was the selling of Phoenix insurance company to Fosun. This made headlines a few times as the deal was supposed to close by June 2015 but eventually was canceled in February 2016 as reported. This happened because of the objections of the Ministry of Finance over whether a foreign entity should hold Israeli pension funds.
Megadeals like these arise in headlines every one to two years.