Israel Matzav

Israeli high tech company to be sold to Russian state nuclear company?

ECI Telecom, one of Israel's oldest high tech companies, may be sold to Russian nuclear energy giant Rosatom.

ECI Telecom Ltd. chairman and controlling shareholder Shaul Shani continues to talk to the Russian government about selling the Israeli telecommunications equipment company. Just after a year after it was reported that Shani had written to Russia's President Dmitry Medvedev about buying ECI for $2.5 billion, Medvedev has another possibility for buying the company, according to Russian newspaper Izvestia. This time, the potential buyer is Russian atomic energy giant Rosatom Nuclear Energy State Corporation, which is state owned.

According to the Russian newspaper, the talks on merging ECI into Rosatom are at a valuation of $5 billion, but it would appear that this refers to the total value of a project or activity in which ECI would be involved in Russia. ECI's value will probably be closer to $500 million.

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At present, it looks as though the current report, just like at the end of 2010, will not lead to an acquisition even though Russia is among ECI's biggest customers. The report cites government sources as saying that they believe that now is the best time for carrying out the acquisition, but last time around too sources were quoted in the Russian press that said they believed that the Russian government would accept Shani's offer and pay $2.5 billion for the company, which did not happen in the end.

A spokesperson for ECI declined to comment on the report.

Israel Television reported another issue on its 9:00 pm news magazine (which is simulcast on radio): Rosatom is a supplier for Iran's nuclear program and the Israeli government would have to approve the sale.

Labels: Iranian nuclear program, Israeli high tech, Russia

posted by Carl in Jerusalem @ 9:31 PM