Israel's Antitrust Authority Demands Super-Pharm Stake Sale in Cal Deal

Israel's Competition Authority has instructed Union Investments, part of the Union-Harel consortium, to divest its 35% stake in the Super-Pharm pharmacy chain if the consortium proceeds with its acquisition of the credit card company Cal. This decision follows a year of delays and several months of review by the antitrust regulator.

Previously, the parties had explored approving the deal with restrictions on Union-Harel's access to Cal's data, but failed to agree on a mechanism for enforcing these limitations. The regulator's primary concern is the extensive customer data Cal possesses, including transaction details and personal information, which could significantly impact the retail market.

Union Investments holds a stake in Super-Pharm, while Harel, the other consortium member, would gain access to Cal's data through the acquisition. The authority noted that the retail chain Shufersal operates a competing pharmacy network, Be.

Cal's data allows for analysis of transaction volumes, customer demographics, and purchasing behavior, enabling consumer segmentation. The Competition Authority had considered allowing the deal with a complete ban on data transfer to Union or appointing an independent supervisor, but an agreement could not be reached, particularly regarding the scope of such a prohibition.

It remains unclear whether the regulator's demand will derail the Cal sale. Discount Bank is obligated to sell its stake in Cal and has indicated difficulty finding alternative buyers in Israel, listing the company on the Tel Aviv Stock Exchange, or attracting foreign investors. Discount Bank is currently reviewing the Competition Authority's decision.