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Delek in talks to divest US insurance business for $220m

Israel-based diversified conglomerate Delek Group is reportedly engaged in negotiations with US-based investment consortium to divest its US insurance business, Republic Group, in a transaction, which might be valued at nearly $220m.

A report by TheMarker was cited by haaretz.com as saying that both parties are close to signing an agreement.

Dallas-based Republic provides personal property, fire, automobile and commercial insurance through independent agents mainly in Texas, Oklahoma, Louisiana, Mississippi, New Mexico and Arkansas.

Besides meeting a due diligence process, the transaction will require concerned regulatory approvals in the US.

In addition to offloading US insurance business to Republic Group, Delek is also considering to dispose of its 53% shareholding in Phoenix insurance. Delek has appointed US lender Wells Fargo to find a suitable buyer.

In 2006, Delek acquired Republic from a private equity fund for $250m in cash and assumed debt of $50m associated with the acquisition of Republic.