Israel's Competition Authority Scuttles Cal-Discount Deal Over Super-Pharm Stake
Israel's Competition Authority has effectively killed the proposed acquisition of Cal (Israel Credit Cards Ltd.) by Discount Bank, citing insurmountable conditions. The authority mandated that George Horesh and Union, controlled by Horesh, must permanently sell their 37% stake in the country's largest pharmacy chain, Super-Pharm, to an approved third party as a prerequisite for the deal's approval. This decision was communicated to Horesh by Competition Authority Chairwoman Michal Cohen, with his business partner Yair Hamburger of Harel also present.
The authority expressed significant concerns that Cal's extensive customer data, if transferred to Super-Pharm, could create unfair competition in the pharmacy and health sectors. Similar concerns were previously raised when Harel sought to acquire Isracard. The authority also feared Super-Pharm could leverage Cal's data for strategic decisions, such as new store locations, impacting competitors like Shufersal's BE chain.
Despite arguments from experts presented by Horesh and Hamburger suggesting data transfer limitations and existing agreements with Visa and Mastercard, the authority found some claims to be inaccurate, eroding trust between the parties. The authority had previously rejected the acquirers' identities due to competition challenges in the pharmacy and health fields.
Discount Bank, which had preferred this deal over a higher offer from Moti Ben-Moshe, will now proceed with preparing Cal for an IPO, likely at a reduced valuation. Cal has already lost its Fly Card club with El Al to Isracard, and faces friction with its current partner Shufersal. Meanwhile, Gideon Tadmor, through Navitas, is reportedly interested in acquiring Cal.
Discount Bank had requested an extension from the Ministry of Finance and the Supervisor of Banks to divest its Cal holdings by the legal deadline of May 2027, a request facing opposition from advocacy groups like Lobby 99. The management of Cal, led by CEO Yafit Griani, is expected to continue in their roles under the deal's collapse.