Pelephone Submits NIS 2 Billion Offer to Acquire Hot Mobile in Major Industry Merger Bid

In a move that could significantly reshape Israel’s cellular market, Pelephone, a subsidiary of Bezeq, has submitted an offer to acquire Hot Mobile for NIS 2 billion. The proposed deal, which would effectively serve as a merger of the two cellular operators, was revealed by Calcalist on Tuesday.

The offer was submitted Monday afternoon to Rothschild Investment Bank, which is managing the sale process on behalf of Hot’s parent company, controlled by Patrick Drahi.

High-Stakes Offer Led by Pelephone CEO and Chairman

The bid is being led by Pelephone CEO Ilan Sigal and Chairman Tomer Raved, to strengthen Pelephone’s position in Israel’s increasingly competitive telecom sector.

According to the proposal, Pelephone believes there is a “high chance of regulatory approval” from the Israel Competition Authority, referencing the precedent of Cellcom’s acquisition of Golan Telecom, which did not trigger antitrust pushback.

Hot Mobile’s Future

In April, Calcalist reported that Patrick Drahi was exploring options to sell Hot or attract investors, with a valuation of €2 billion for the full company. One option being weighed is to split the company and sell business segments individually — including telephony, internet, television, and cellular.

Pelephone is now aiming to acquire only the cellular segment, which could become a separate transaction if Drahi agrees to a partial sale.

Subscriber Base and Financial Snapshot

As of Q1 2025:

• Hot Mobile has 2 million subscribers and quarterly revenues of approx. €55 million (NIS 220 million).

• Pelephone has 2.63 million subscribers, with quarterly revenue of NIS 360 million.

• Cellcom leads the market with 3.6 million subscribers and NIS 409 million in revenue.

• Partner has 2.6 million subscribers.

If the deal goes through, the merged entity would become a stronger competitor in terms of scale to Cellcom and Partner, consolidating a significant market share.

Bezeq Confirms Non-Binding Offer

In a filing with the Tel Aviv Stock Exchange, Bezeq confirmed the offer, stating:

“This is a preliminary and non-binding document of intent that was submitted without conducting prior contacts and based on public and partial information only. There is no assurance that its submission will lead to the beginning of contacts.”

Strategic Context: Global Consolidation Trends

Pelephone’s move comes amid a global wave of telecom consolidations, including T-Mobile’s $4.4 billion acquisition of US Cellular earlier this year and the Sprint merger in 2020.

Sources say Pelephone moved forward with the offer after receiving indications that Drahi is open to discussing a separate sale of Hot Mobile.

Investment and Infrastructure: The Merger Narrative

The key rationale behind the merger is that a stronger, combined entity would have greater cash flow, allowing for increased investment in infrastructure — especially in 5G and future 6G networks.

Additionally, the company is expected to accelerate the deployment of network infrastructure in peripheral regions, including the north, the Negev, Judea, and Samaria.