Generation Capital wins battle for Shikun & Binui Energy

The NIS 4.45 billion deal will make Generation Capital subsidiary PowerGen one of the largest energy companies in Israel - if regulatory hurdles can be overcome.

Infrastructure investment fund Generation Capital (TASE: GNRS) is buying Shikun & Binui Energy (TAE: SBEN) for NIS 4.45 billion, the two companies have announced. The bid from Generation Capital’s competitor Keystone Infra (TASE: KSTN) has thus been rejected. This is a significant acquisition, one that positions Generation Capital as a prominent player in power production, to the extent that it will need to undertake complementary steps vis-à-vis the Competition Authority to allay fears of concentration in the market.

Should the Electricity Authority not approve the deal, Generation Capital will pay a NIS 300 million penalty to Shikun & Binui Energy. For its part, Shikun & Binui has committed to pay Generation Capital a NIS 300 penalty should it agree to a rival bid from Keystone Infra. As reported by "Globes", the negotiations on the deal took longer than expected because of disputes over the right response to decisions by the regulator.

Generation Capital’s energy subsidiary PowerGen is trying to establish itself as one of the strongest companies in the energy sector. It is constructing the Reindeer power station, which was recently approved by the Electricity Authority, and seeks to expand through the acquisition of Shikun & Binui Energy.

Shikun & Binui Energy, headed by Yuval Skornik and controlled (67%) by construction and infrastructure group Shikun & Binui (TASE: SKBN), holds power production projects currently amounting to 3.2 gigawatts. The Ramat Hovav, Orot Penina (Hagit) and Etgal Ashdod power plants are in its portfolio, plus renewable energy and storage projects.

Regulatory difficulties expected

The main attraction for PowerGen is actually Shikun & Binui’s renewable energy assets, since at present only power from renewable sources can be sold at discounted prices to private customers. This fits well with one of Generation Capital’s most significant holdings, Bezeq-Gen, the largest private household power supply company in Israel, owned jointly with telecommunications company Bezeq (TASE: BEZQ). The acquisition will enable Bezeq-Gen to expand at a time when there is not sufficient cheap power available, and the Electricity Authority has halted tenders for discounted power for suppliers that were meant to deal with the shortage.

The acquisition will encounter difficulties from the regulators, the Competition Authority and the Electricity Authority. The Competition Authority is concerned about concentration in the power production sector, and recently blocked the expansion of the Dorad power plant because of the minority stake in it of Edeltech, the largest private power producer in Israel.

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In order to prevent a similar decision against PowerGen, which after completion of the deal will become one of the largest energy companies in the country, the parties intend to carry out a swap deal with Rapac (TASE: RPAC), which together with PowerGen holds shares in the Alon Tavor and Reindeer (under construction) power plants. Rapac will receive PowerGen’s holding in Alon Tavor and in exchange PowerGen will receive Rapac’s holding in Reindeer. This will create a "separation of forces" that will reduce the scope of each company. At this stage, Generation Capital believes that this swap deal will enable it to overcome the regulatory hurdle, together with additional adjustments if required.

Published by Globes, Israel business news - en.globes.co.il - on July 29, 2026.

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