Elbit, Elron sign merger accord

Elron board also authorized talks with DIC to buy out DEP Technology Holdings
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Elbit (Nasdaq:ELBT) and Elron Electronic Industries (Nasdaq:ELRNF) have signed a definitive merger agreement, the two companies announced Thursday.

The accord follows the approval of the transaction by the companies' boards of directors.

Under the agreement, terms of which were announced in September, Elron will issue to Elbit's shareholders 0.45 new Elron shares for each ordinary Elbit share.

Elron, a hi-tech holding company, already holds 44% of Elbit's outstanding ordinary shares. Elbit invests in various high-tech companies, including Israeli mobile phone operator Partner Communications (Nasdaq, TASE: PTNR, LSE:PCCD)

Completion of the deal is subject to various approvals including shareholders and regulatory authorities.

In a separate statement to the Tel Aviv Stock Exchange, Elron said its board had authorised negotiations with Tel Aviv-listed Discount Investment Corp for the purchase of all of Discount's shares in privately-held DEP Technology Holdings in exchange for 2.26 million Elron shares.

Elron's shares closed at $12.64 on Nasdaq on Wednesday, making the deal worth nearly $29 million.

DEP is a holding company in which Elron holds 33% while Discount holds the remaining 67%.

Discount Investment, one of Israel's leading holding companies, is also Elron's controlling shareholder with a 42% stake.