Soon-to-be-public Sirius’s agreement to acquire a controlling stake in Israel’s Phoenix has been declared “null and void” after it failed to secure regulatory approval for the acquisition.

In a statement, Phoenix owner Delek said that the deal was dependent on the two firms getting the go-ahead from regulators by now.

However the Tel Aviv based firm said it would continue to seek a buyer for the P&C and life insurer.

Last week, Sirius revealed the termination of its deal with Delek as it announced a reverse merger into a US listed company in a move intended to assist with its international M&A plans, which are thought to have been hampered by regulators closely scrutinising deals by privately-owned Chinese financial companies.

At the time, Sirius said that the agreement “to acquire a controlling interest in The Phoenix Holdings Ltd will terminate on or prior to 2 July, 2018”.

In November last year, Sirius International - which is owned by the China Minsheng Investment Group - announced an agreement to pay Delek Group, NIS 2.3bn, the equivalent of around $630mn, to acquire a 47.35 percent stake in the P&C and life insurer after exercising a call option.

Delek was obliged to put the Phoenix shares to Sirius following a September deal to acquire its smaller 4.9 percent stake.

Last week, AM Best confirmed it had a maintained its negative outlook for Sirius’s A financial strength rating, despite its $2.2bn deal to become Nasdaq listed.

“The under review with negative implications status has been maintained as AM Best needs time to  review the implications of the latest announcements on the rating fundamentals of SIG [Sirius] and its rated subsidiaries,” the rating agency said.

Sirius becomes the latest Chinese-owned form that has failed to receive regulatory approval from the Israeli regulators to acquire Phoenix which has now been available for sale for two years. Others reportedly include Fosun International and Fujian Yango Group.

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