Cellcom Proposes Netvision Takeover

Cellcom Israel Ltd announces merger negotiation proposal to Netvision

March 14, 2011

2 Min Read

NETANYA, Israel -- Cellcom Israel Ltd. (NYSE:CEL - News) (the "Company") announced today that on March 13, 2011, the Company approached Netvision Ltd., or Netvision, with a proposal to negotiate a merger between the Company's subsidiary and Netvision.

The Company has previously announced that it was at the preliminary stages of examining possibilities for a business combination with Netvision, an Israeli International Landline Operator, or ILD, providing Internet services, and landline domestic and international voice services. Netvision and the Company are controlled by the IDB group. Recently, a regulatory change was made allowing a cellular operator to hold an ILD subject to structural separation of the long distance operation from the cellular operation, and subject to the fulfillment of certain conditions, even without such structural separation.

In light of this regulatory change, the Company approached Netvision with the aforementioned proposal. The proposed merger contemplates the purchase by the Company of all of Netvision's outstanding share capital for cash consideration, based on its share capital's estimated value of NIS 1.5 billion, subject to customary adjustments, as a result of which Netvision would become a wholly owned subsidiary of the Company. The merger proposal is subject to, among other things, negotiating and finalizing terms of definitive agreements covering the transaction, further due diligence by the Company, independent valuation and receipt of fairness opinions in respect of the consideration to be offered, and approval by both companies' audit committees and boards of directors. If a definitive agreement is reached, closing would be subject, among other things, to approval of the shareholders of both companies by a majority of shareholders not affiliated with IDB, approvals of the authorized bodies of both companies' controlling shareholders and the requisite regulatory approvals. Netvision has not responded yet to our proposal and we can provide no assurances that we will enter into any transaction. If an agreement is reached, we intend to fund the purchase price, in whole or in part, with new debt financing arrangements.

Cellcom Israel Ltd.

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