Israel's Capital Markets Authority Opposes Wobi Acquisition
Translated & summarized from Calcalist by baba
Israel's Capital Markets Authority has officially opposed The Phoenix's acquisition of the insurance comparison website Wobi, despite prior approval from the Competition Authority. The authority cited concerns over Wobi's objectivity and potential favoritism towards The Phoenix's products due to the latter's dominant market position. The Phoenix expressed surprise and stated that their arguments were thoroughly reviewed by the Competition Authority, which approved the deal, and that the current objections contradict inter-ministerial committee recommendations. The Phoenix is considering its next steps, which may include a legal appeal.
The story in 5 lines · by baba
- Israel's Capital Markets Authority opposes The Phoenix's acquisition of Wobi, citing objectivity concerns.
- The Competition Authority approved the deal six months ago, creating regulatory conflict.
- The Phoenix acquired Wobi for NIS 150 million, aiming to expand its insurance services.
- Concerns exist that Wobi might favor The Phoenix's products over competitors'.
- The Phoenix is surprised by the opposition and may pursue legal action.
Israel's Capital Markets, Insurance and Savings Authority has informed The Phoenix insurance group that it opposes the company's acquisition of Wobi, an insurance price comparison website. The authority sent a letter to The Phoenix on Tuesday, announcing its objection and summoning the company for a hearing before a final decision is made. This move is unusual, as the Competition Authority had already approved the deal six months prior, in May. The Capital Markets Authority, however, has maintained its initial negative stance.
The Phoenix acquired Wobi for NIS 150 million on October 5 through its Oren Mizrach agency. Wobi specializes in comparing prices for car and general insurance, with plans to expand into other areas like pet insurance. Despite accumulating significant losses over the years, Wobi's potential as a tax asset for The Phoenix was noted. The Capital Markets Authority's primary concern is that The Phoenix's dominant position in the insurance agency market, valued at NIS 4.5 billion with annual profits of approximately NIS 400 million, could compromise Wobi's perceived objectivity as a price comparison engine. The authority fears that Wobi, under The Phoenix's ownership, might favor its parent company's products over those of competitors.
Sources involved in the deal claim the Capital Markets Authority has been negative from the outset and requested fewer documents than the Competition Authority. The Phoenix, led by CEO Eyal Ben Simon, aims to preserve Wobi's brand. The Capital Markets Authority cited precedents where insurance companies owning search engines were required to disclose their ownership clearly, referencing cases involving Menora Mivtachim's stake in Bester and Harel's ownership of Polisa.co.il.
The Phoenix expressed surprise at the Capital Markets Authority's position, emphasizing that the Competition Authority thoroughly reviewed all arguments and approved the deal. They also stated that the current objections contradict recommendations from an inter-ministerial committee on institutional entities owning insurance agencies. The Phoenix is reviewing the authority's decision and considering its next steps, potentially including an appeal to the court against the decision of the Supervisor of Insurance, Amit Gal.