Victory Owner Seeks Antitrust Approval for 30% Carrefour Stake

Eyal Ravid, the controlling owner of the Victory supermarket chain, has applied to the Israel Competition Authority for permission to acquire up to 30% of the shares in the Carrefour Israel supermarket chain during its upcoming offering. While sources close to the offering suggest Ravid may only be able to purchase 10% initially, he intends to try and secure the larger stake from underwriters. If unsuccessful, he plans to pursue the remaining shares at a later date.

First opposition to the acquisition has been filed with the Competition Authority by the Movement for Quality of Government in Israel. The organization argues that approving such a move raises significant competitive concerns due to the already concentrated nature of the Israeli food retail market. They contend that allowing direct capital holdings between direct competitors could weaken their independence and increase the risk of harm to consumers.

Carrefour Israel, controlled by the Zalkind brothers' Electra Consumer Products, plans to issue new shares in a sale estimated at NIS 400 million. Victory had previously approached the Competition Authority seeking approval for its share purchase, likely with an eye toward a future merger. The Movement for Quality of Government highlights that the six largest food retailers in Israel hold 62% of the market share, with Victory and Carrefour together holding 9%.

The movement warns that competition is a key mechanism for controlling retailer power and ensuring competitive prices for consumers. They argue that creating ties between chains or reducing the number of players could weaken this mechanism, leading to price increases. The group cites the 2005 Shufersal acquisition of Clubmarket, which was approved despite later concerns about Shufersal violating its merger conditions, and the collapse of the Mega chain as examples of how market structures can change and lead to consolidation, potentially harming consumers.