Azrieli Group to buy ZMH Hammerman at NIS 873m valuation

Israeli shopping malls and offices giant Azrieli Group (TASE: AZRG) is set to buy residential real estate development and construction company ZMH Hammerman (TASE: ZMH). After protracted negotiations lasting a month and a half, Azrieli Group chairman Danna Azrieli, who has a controlling 56% stake in the company, has reached agreement with institutional investors to raise the value of the deal by NIS 18 million to NIS 873 million.

As part of the agreements, which should receive support at ZMH Hammerman’s general meeting, Azrieli agreed to an increase in value in exchange for the support of the institutional bodies that threatened to vote against the agreement. In doing so, Azrieli has removed the final obstacle on the way to acquiring the company, which will add residential development activity to its real estate empire, and will result in ZMH Hammerman delisting from the TASE.

Azrieli Group said, “After direct and transparent discussions, we reached respectful agreements that will enable the closing of the deal. As part of the understandings, we reached an agreement that the company’s value will be linked to the consumer price index from March 2025, with an addition of NIS 5 million shekels, as a sign of goodwill to complete the move. We appreciate all parties involved for their flexibility and commitment to the success of the deal.”

It was also agreed that accounting firm Ernst & Young (EY) partner Yuval Ganani, who mediated between Azrieli and ZMH Hammerman, would waive about half of the brokerage fee, which was supposed to be NIS 13 million, which Azrieli planned to pay from ZMH Hammerman’s funds.

The institutional investors threatened to scupper the deal

The agreements between the parties come after Azrieli reported in June that it had signed an agreement to acquire control of ZMH Hammerman at a valuation of about NIS 855 million. Under the terms of the agreement Azrieli was to buy 67% of the shares of the company for NIS 559 million, while the remaining shares would stay with ZMH Hammerman controlling shareholders Haim Feiglin and Ran Ben-Avraham.

However, the TASE rally and sharp jump in the share price of the company, reshuffled the deck, and led the institutional entities invested in ZMH Hammerman to demand a much higher value. Opposition to the deal was led by the Brosh activist investment fund (4.9%) managed by Amir Efrati, which joined the other institutional entities (Phoenix, Harel and Clal), which hold 30% of the shares.

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The fact that the Tel Aviv Construction Index jumped by over 30% in the month following the launch of the Iran operation led the institutional bodies to demand a value of about NIS 1 billion, about 17% higher than the original value. “We always thought that the value of ZMH Hammerman should be over NIS 1 billion, even higher than the updated value in the deal with Azrieli,” said a source who was among the group of opponents at the time. At one stage ZMH Hammerman’s market cap on the TASE exceeded its valuation in the deal. On the other hand, Azrieli resolutely declared that it had no plans to increase the valuation in the deal, even if the deal had to be abandoned. In the end both sides compromised, with Azrieli adding to the valuation.

Expanding Azrieli’s real estate empire

ZMH Hammerman, managed by Haim Feiglin, develops and builds real estate projects, mainly in the residential market. The company was founded in 1997 and was floated on the TASE ten years later. By the end of 2024, it had built over 10,800 apartments around Israel, as well as 356,000 square meters of commercial, office and industrial space.

Over the past year, the company’s stock has been volatile, among other things due to the negotiations for the deal and the renewed interest of investors in development companies following the Iran operation. Since the start of 2025, the company’s stock has risen by about 11%, completing a jump of about 61% in the past year and is currently trading with a market cap of NIS 829 million.

Azrieli Group said after the agreement was reached. “Our entry into the world of residential development in Israel complements the group’s diverse areas of activity and strengthens our commitment to continuing to build and develop the country – a Zionist value that has accompanied us all along the way. We believe that by combining the group’s experience and capabilities, with the expertise of ZMH Hammerman, we will be able to further expand our contribution to the Israeli economy and the local real estate industry.”

Published by Globes, Israel business news – en.globes.co.il – on August 6, 2025.

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