Discount Bank and Union Group Push for Unconditional Approval of Cal Sale by Competition Authority
Last Wednesday, a senior delegation from Discount Bank, Union Group led by George Horev, Harel Investments, and Cal met with Israel's Competition Authority in a final effort to secure unconditional approval for the sale of Cal without preconditions. The delegation included Union CEO Eyal Golan, Discount Bank CEO Avi Levi, Cal CEO Yafit Griani, and Hila Himi, former Discount Capital CEO, who was involved in structuring the deal. Former Bank Hapoalim CEO Dov Kotler, the driving force behind the buyers and slated to become Cal’s chairman post-deal, was absent due to leave abroad.
The meeting aimed to persuade Competition Commissioner Michal Cohen to approve the transaction without restrictions or at least ease the authority’s concerns by proposing solutions to the main obstacle delaying approval. As reported on June 18, Cohen indicated the deal could not proceed as is while Cal remains a partner in Shufersal’s customer club. The authority leans toward approving the deal only if Cal exits the Shufersal club, which would alleviate significant competition concerns. The final decision, expected in recent days, has been postponed and is now anticipated within two weeks.
The September 2025 deal involves Discount Bank (72%) and Bank Leumi (28%) selling Cal to Horev’s Union Group and Harel Investments for 3.9 billion shekels, including deferred payments. Post-completion, Horev will hold 80% and Harel 20% of Cal’s shares. During the meeting, the companies, supported by legal and advisory teams, proposed transitional measures such as a "Chinese wall" between Super-Pharm’s operations and the Shufersal club, given Super-Pharm’s ownership of the competing BE pharmacy chain.
The Competition Authority’s opposition stems from Horev’s 33% stake in Super-Pharm, Israel’s largest pharmacy chain, controlled by Leon Kopelr, while Shufersal owns BE, a direct competitor. Cal’s access to extensive customer data from Shufersal’s club, including purchases outside the chain, purchase categories, frequency, and spending, raises concerns about sensitive information concentration. The authority fears this could harm competition in the pharmacy sector.
Discount Bank is preparing for a scenario where approval is conditional on Cal leaving the Shufersal club. Such a condition could prompt Horev-Harel to demand a significant price reduction, possibly around one billion shekels, or even withdraw from the deal. In that case, Discount may pursue Cal’s public offering, a complex move requiring Bank Leumi’s consent, as it is not legally obliged to sell its stake unlike Discount, which must divest by mid-2027. The capital market’s current positive climate may still struggle to value Cal as highly without its key growth drivers, the Shufersal club and El Al’s FlyCard, which Cal lost to competitor Isracard in March. Regardless, if the Competition Authority approves the deal without conditions, Shufersal is expected to file an official objection.
