Israel's Concentration Committee to Reconsider Shapir's Control Permit for Ashdod Refinery
Translated & summarized from Calcalist by baba
Israel's Concentration Committee will reconsider Shapir Engineering's bid for a controlling stake in the Ashdod Oil Refinery after initially recommending against it. The committee's renewed discussion follows Shapir's agreement to sell its natural gas operations to Allied for NIS 230 million. While competition and finance ministries previously opposed the permit, energy and finance ministries now seek reconsideration, with pressure to decide before elections. Shapir expects a NIS 50-100 million profit from the gas operations sale.
The story in 5 lines · by baba
- Israel's Concentration Committee will re-discuss Shapir Engineering's bid for a controlling stake in Ashdod Oil Refinery.
- Shapir finalized a NIS 230 million deal to sell its natural gas operations to Allied.
- Previous opposition cited concerns over increased market concentration for Shapir.
- The Ministries of Finance and Energy are pushing for a renewed discussion before elections.
- Shapir expects a NIS 50-100 million profit from the sale of its gas operations.
The Concentration Committee is set to hold a renewed discussion on Shapir Engineering's request for a controlling stake in the Ashdod Oil Refinery (AOR). This comes after the committee initially recommended against granting Shapir, controlled by the Shapira brothers, permission to increase its shareholding from 10% to 65% in late July. The development is seen as positive for Shapir, potentially influenced by its recent agreement to sell its natural gas activity to Allied.
The committee's initial majority decision, two against one, opposed the permit, citing concerns that control of AOR, deemed a concentrated entity, would further increase Shapir's overall market concentration. The Director General of the Competition Authority and committee chair, Michal Cohen, and the Director General of the Ministry of Finance, Israel Mallaichi, opposed the permit. However, Chairman of the National Economic Council, Prof. Avi Simhon, suggested approval could be possible if Shapir committed to significant investment in the refinery's development.
Despite initial opposition, the Ministry of Energy, through its Director General Yossi Dayan, has argued that AOR needs a controlling core or strategic investor to operate efficiently and fund its development. Both the Ministry of Finance and the Ministry of Energy are now pushing for the Concentration Committee to revisit the issue, with some sources indicating pressure to hold the renewed discussion before the upcoming Knesset elections.
Shapir finalized a binding agreement yesterday to sell its natural gas operations to Allied for NIS 230 million, potentially increasing later. Allied will acquire Shapir's full holdings in Super N.G. and Super N.G. Hadera and HaEmekim, companies holding licenses for natural gas distribution in central Israel and the Hadera and HaEmekim regions. Shapir estimates the sale will yield a pre-tax profit of NIS 50-100 million.
Moshe Savoski, Shapir's CFO, stated the sale aligns with a long-standing company decision to realize mature franchise activities to return equity and prepare for future investments, particularly in infrastructure. Shapir has recently brought institutional investors into its infrastructure projects, including Highway 6 North, the fast lane between Jerusalem and Tel Aviv, and Highway 16 into Jerusalem, raising NIS 556 million from Migdal, Amitim, and Clal, and an additional NIS 109 million from Meitav. Infrastructure is Shapir's second-largest sector after industry, accounting for 44% of its revenue in January-June.
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