Weishur-Ayalon Group Eyes Takeover of Cal and Altshuler Shaham
Translated & summarized from TheMarker by baba
The Weishur-Ayalon Group is exploring the acquisition of credit card company Cal, adding to its planned purchase of Altshuler Shaham. The combined entity would manage 170 billion shekels in assets and include a credit card firm, potentially challenging major financial groups. However, the deals face significant hurdles, including integration challenges and lengthy approval processes from the Israel Competition Authority.
The story in 5 lines · by baba
- Weishur-Ayalon Group is considering acquiring credit card company Cal, alongside its planned purchase of Altshuler Shaham.
- The potential combined entity would manage 170 billion shekels in assets and include a credit card firm.
- Market skepticism exists regarding the Altshuler Shaham deal, with its current valuation lower than the initial agreement.
- The proposed acquisitions face significant challenges, including integration difficulties and potential failure rates of mergers.
- Approval from the Israel Competition Authority is a major obstacle, with past cases showing lengthy and conditional processes.
The Weishur-Ayalon Group is reportedly considering the acquisition of the credit card company Cal, in addition to its ongoing efforts to purchase a significant portion of Altshuler Shaham. The potential deal for Altshuler Shaham was valued at 1.8 billion shekels, though the company's pension fund is currently trading at a lower valuation of 1.1 billion shekels, suggesting market skepticism about the transaction's feasibility. If both acquisitions succeed, Weishur-Ayalon would create a financial entity managing approximately 170 billion shekels in assets, including a credit card company, positioning it as a formidable competitor to major players like The Phoenix.
However, two primary challenges loom over the proposed consolidation. The first is the inherent difficulty of integrating two large acquisitions, with a significant percentage of business mergers globally failing. The article points to the troubled merger of Altshuler Shaham and Psagot as a cautionary tale, where the combined entity's value subsequently decreased. The second, and perhaps more critical, hurdle is approval from the Israel Competition Authority. The lengthy approval process, exemplified by the stalled sale of Cal to George Horesh, where the authority imposed conditions effectively blocking the deal after 12 months, raises concerns about the timeline and potential outcomes.
Industry insiders suggest that the Competition Authority's protracted and conditional approach, which differs from the faster processes seen in countries like the US, creates uncertainty and discourages complex business transactions. This bureaucratic inertia is seen as a hindrance to fostering genuine competition within the Israeli market, making companies hesitant to bring ambitious deals before the authority.
Mentioned
