Regulator queries Mizrahi Tefahot-Union Bank merger

Mizrahi Tefahot
Mizrahi Tefahot

The Israel Antitrust Authority found that 6,000 customers switched to Union Bank last year, showing its contribution to competition.

The Israel Antitrust Authority is raising objections to the merger between Mizrahi Tefahot Bank (TASE:MZTF) and Union Bank of Israel (TASE: UNON). At a recent meeting between Israel Antitrust Authority representatives, Mizrahi Tefahot Bank representatives, and the owners of Union Bank, the Israel Antitrust Authority presented its findings from an examination it had conducted. An important part of these findings concerned customer churn between the banks.

Sources inform "Globes" that the Antitrust Authority gathered figures from the banks indicating that Union Bank had recruited 6,000 customers with monthly salaries of NIS 5,000 or more from other banks during the year. This seems to be a rather small number, since there are currently 3.5 million bank accounts in the household sector. The Antitrust Authority believes, however, that this number shows that Union Bank is contributing to competition in the banking system, because it is not negligible in comparison with the total number of customers who switched banks.

Other issues involving the merger emerged during the meeting, such as its effect on the mortgage market, because Mizrahi Tefahot Bank, managed by CEO Eldad Fresher, is the largest player in this market. There is also a question about the merger's effect on credit for the diamond sector. The parties in the merger received the data and are due to send their comments on them in the near future. An Antitrust Authority team will then consult with the mergers committee, and if it decides to oppose the merger, the parties will be summoned to a hearing before the final decision. Antitrust Authority legal advisor will make the decision on the merger, because Antitrust Authority director general Michal Halperin has a conflict of interest in the matter and is therefore barred from dealing it.

Union Bank, controlled by the Landau and Manor families, Dr. Yael Almog Zackai, and Shlomo Eliahu, has been up for sale for a long time. At the same time, there has been no serious interest in the deal. The merger agreement with Mizrahi Tefahot Bank was signed nearly six months ago at a multiple of only 0.6 for Union Bank, meaning a value of NIS 1.5 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on April 24, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Mizrahi Tefahot
Mizrahi Tefahot
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