Generation Fund Eyes Shikun & Binui Energy in $4.5B Deal

Generation Fund is reportedly in advanced discussions to acquire Shikun & Binui Energy, a significant player in Israel's electricity generation sector, in a transaction valued up to approximately 4.5 billion shekels (around $1.2 billion USD). This potential acquisition marks a substantial move within the Israeli energy infrastructure market, which is experiencing heightened demand driven by factors like the rapid expansion of data centers.

The proposed deal structure involves Generation Fund acquiring 100% of Shikun & Binui Energy's shares, either directly or through its subsidiary Powergen Ltd., potentially alongside other investors. The initial purchase price is set at 4.05 billion shekels, with an additional 150 million shekels to account for the time between signing and deal closure. Furthermore, contingent payments of up to 300 million shekels could be made over 60 months, tied to the successful advancement of key existing projects within Shikun & Binui Energy's portfolio.

Adding a notable dimension to the transaction is the potential involvement of Zohar Levi, chairman and controlling shareholder of Summit. Levi is reportedly in negotiations with Generation Fund to invest in the acquisition, leveraging his existing deep ties to the energy and real estate sectors. Summit, a publicly traded entity with a market capitalization of approximately 3.8 billion shekels, has a diversified portfolio including real estate and energy assets, underscoring Levi's strategic interest in this energy sector consolidation.

Shikun & Binui Energy, which operates power generation facilities utilizing natural gas and renewable sources, is currently controlled by Shikun & Binui, with Nati Saidoff holding a majority stake. Shikun & Binui had previously announced exploring the sale of its entire stake in the energy subsidiary, a move that would provide the parent company with a significant exit and bolster its balance sheet by reducing leverage. Shikun & Binui Energy's market valuation stands at roughly 4.1 billion shekels, having seen a notable 41% stock price increase in the preceding two months.

The recent surge in Shikun & Binui Energy's stock performance is partly attributed to anticipated growth in electricity demand, particularly from the burgeoning data center industry in Israel. The company's own financial projections highlight that demand from these facilities is outpacing the original planning for the national grid, creating a favorable environment for renewable energy assets. This trend aligns with Generation Fund's investment thesis, as the fund actively targets infrastructure opportunities in energy, environmental services, transportation, and logistics.

Generation Fund, co-founded by Yosef Singer and Erez Bloshtein, manages approximately 5.1 billion shekels in assets as of the end of 2025. Its investor base comprises major institutional players such as Migdal, Harel, Menora, and Phoenix. The fund anticipates substantial investment opportunities in the infrastructure sector over the next decade, positioning itself to capitalize on expected growth within Israel and beyond.

The parties are working towards finalizing a non-binding term sheet, which would include an exclusivity period for Generation Fund to conduct due diligence and negotiate a definitive agreement. This potential transaction underscores the ongoing consolidation and strategic repositioning within Israel's vital energy infrastructure sector.