Israel Approves Union's Acquisition of Cal Credit Card Company

Israel's Competition Authority has approved the acquisition of the credit card company Cal by Union Investments and Development, but with a significant condition: Union must sell its entire stake in the pharmacy chain Super-Pharm. The approval follows months of review and discussions regarding potential anti-competitive practices.

Competition Authority officials expressed concern that Union's ownership of Super-Pharm, combined with potential access to Cal's extensive customer transaction data, could give the pharmacy chain an unfair advantage over its competitors. Cal processes data from approximately 4 million credit cards, offering insights into purchasing habits, regional spending, and business revenues, which could be leveraged by Super-Pharm to strengthen its market position.

Initially, the authority considered imposing restrictions on data sharing between Cal and Union. However, after prolonged negotiations, an agreement on the scope of these restrictions and oversight mechanisms could not be reached. Consequently, the authority mandated a structural separation, requiring Union to divest its Super-Pharm holdings before proceeding with the Cal merger.

The deal also involves Harel Insurance, which plans to acquire 20% of Cal, with Union acquiring the remaining 80%. The Competition Authority also stipulated that Cal cannot share any information with Harel, nor can Harel access or utilize Cal's data. This condition aims to prevent Harel from combining health insurance data with credit card transaction information, which could lead to personalized pricing and hinder competition in the insurance market.

The merger can proceed only after Union completes the sale of its Super-Pharm shares and fulfills all other stipulated conditions. The approval remains valid for up to one year or until the transaction is finalized, whichever comes first.