Competition Authority Blocks Melisron's Acquisition of Kanyon HaZahav in Major Deal Collapse

The proposed merger between Melisron and Kanyon HaZahav has been definitively canceled after Israel's Competition Authority opposed the deal. The authority rejected Melisron's attempt to acquire the 25% stake held by the Gindi brothers, citing concerns over reduced competition since Melisron would gain control through additional holdings in Migdal, which owns 75% of the mall. Following this decision, Melisron withdrew its merger request.

The collapse was anticipated after Migdal announced three weeks earlier it would purchase the Gindi brothers' shares for 840 million shekels, the same stake Melisron had sought to acquire. This move indicated Migdal's skepticism about Melisron securing regulatory approval after eight months of deliberations with the Competition Authority led by Michal Cohen.

Melisron, controlled by Liora Ofer and one of Israel's two largest mall operators, had faced doubts about obtaining approval due to its market size. In its response to the Tel Aviv Stock Exchange, Melisron argued that the merger would enhance competition and benefit retailers, noting it has no malls in the geographic area of Rishon LeZion where Kanyon HaZahav is located. Melisron also highlighted plans for new commercial centers by other major mall operators nearby, suggesting that without its entry, competition would be weaker.

Melisron further stated it could significantly improve Kanyon HaZahav through renovations, leasing vacant spaces, and introducing new brands. Recently, the mall opened a new floor that had been unused for years and underwent extensive refurbishment. The Competition Authority's rejection prevents Melisron from increasing its market share in the region and maintains the current ownership structure.