Competition Authority Halts Card Company Sale, Banks to Receive $50 Million Payout

The sale of Cal, a major Israeli credit card company, has been canceled following a decision by the Israel Competition Authority. This ruling forces the selling banks, Discount Bank and International Bank, to find a new buyer or explore alternative exit strategies by April. The Competition Authority mandated that the Union Group, owned by the George Horesh family and the intended buyer, must divest its holdings in the Super-Pharm drugstore chain to proceed with the acquisition. This condition ultimately led to the collapse of the deal.

Discount Bank stated that the buyers informed them that the Competition Authority's decision would result in the cancellation of the purchase agreement by November 1, 2026, the end of the final extension period for the deal. According to the agreement, the sellers are entitled to a stipulated compensation of approximately NIS 187 million (about $50 million) in the event of cancellation, divided proportionally. Discount Bank is set to receive NIS 135 million, with the remainder going to International Bank.

The banks are now considering several options. These include appealing the Competition Authority's decision, seeking alternative resolutions with the buyers, or pursuing other methods to divest their stake in Cal, such as an initial public offering on the stock exchange. Discount Bank has also initiated discussions with the Bank of Israel and the Ministry of Finance, seeking an extension or a waiver of the divestment obligation.