Concentration Committee Reconsiders Shapir Engineering's Control of Bazan
Translated & summarized from Calcalist by baba
Israel's Concentration Committee will reconsider its decision to block Shapir Engineering's bid for control of Bazan Oil Refineries after the Ministry of Finance changed its position. Shapir, a major infrastructure firm, was deemed too dominant by the committee, but the company argues its influence is overstated and will diminish. Shapir acquired a 10% stake in Bazan in 2023 and seeks to increase it to 65% for full control. The committee's final decision is pending.
The story in 6 lines · by baba
- Israel's Concentration Committee will review its opposition to Shapir Engineering's bid for control of Bazan.
- The Ministry of Finance has changed its stance, prompting the committee's reconsideration.
- Shapir Engineering is Israel's largest infrastructure company, valued at NIS 15 billion.
- The committee previously cited Shapir's market dominance as a reason to deny control of Bazan.
- Shapir acquired a 10% stake in Bazan in 2023 and seeks to reach 65% control.
- Bazan produces 40% of Israel's fuel consumption and operates two power stations.
Israel's Concentration Committee is set to re-evaluate its summer recommendation against granting Shapir Engineering & Industry full control of Bazan Oil Refineries (Bazan), following a shift in the Ministry of Finance's stance. Shapir, valued at NIS 15 billion with annual revenues exceeding NIS 6 billion, is Israel's largest infrastructure company. Its diverse operations span quarries, concrete plants, infrastructure projects, toll roads, light rail, a desalination plant, logistics, and residential real estate. The company is controlled and managed by the Shapira brothers: Harel, Israel, Gil, and Chen, each holding 14.1%.
The committee's initial opposition stemmed from concerns that Shapir's acquisition of control in Bazan would create excessive market concentration. Shapir already holds a dominant position in the industry, infrastructure, and concession sectors, notably operating key light rail lines and major highways. The committee argued that adding control of Bazan, a critical infrastructure company, would further amplify Shapir's already significant market influence.
Shapir, however, disputes these claims, arguing that existing concession agreements with the state provide sufficient oversight and that its market dominance is overstated and will decrease as future projects are completed or divested. The company pointed to the sale of 70% of its holdings in major highways and the divestment of its natural gas distribution activities as evidence of its willingness to comply with state limitations. Shapir also highlighted that it does not have significant energy sector operations, making its entry into Bazan less likely to cause energy market concentration compared to other potential investors.
Shapir acquired a 10% stake in Bazan in 2023 and holds an option to increase its share to 65%, aiming for control. Bazan, which produces and markets 40% of Israel's fuel consumption and operates two power stations, became a company without a controlling core in 2023 and is currently valued at NIS 1.8 billion. Shapir sees an opportunity to enhance Bazan's industrial operations through its own expertise and potential synergies, particularly given the proximity of Bazan's refinery to Shapir's Ashdod desalination plant.
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