Union and Harel Withdraw from Cal Deal, Pay Discount Bank $50 Million

Union Group, owned by George Horesh, and Harel Group, led by Yair Hamburger, have officially informed Discount Bank that they will not complete the acquisition of Cal, a credit card company. This decision follows the Israeli Competition Authority's ruling and the conditions it set for approving the deal. According to a report filed by Discount Bank with the stock exchange, Union and Harel will collectively pay the bank NIS 187 million (approximately $50 million USD) in compensation. This payment is stipulated in the sale agreement for cases where necessary approvals for the transaction are not obtained. Union Group will bear NIS 150 million of the compensation, while Harel Group will pay NIS 37 million, reflecting their respective shares in the deal. The compensation underscores the deal's failure for Horesh and his associates, who not only lose Cal but also face a significant financial penalty. Discount Bank is preparing for the IPO of Cal, as its deadline to divest its holdings in the company approaches in May 2027. The report also suggests that Union and Harel might appeal the Competition Authority's decision, though such a process could be lengthy and may not alter the conditions, potentially complicating the sale within the bank's remaining timeframe. Consequently, Discount Bank is signaling its intention to seek an extension for divesting its Cal holdings, although this is uncertain given the bank's prior extensions and failure to finalize the sale.