Dor Alon Fuel Stations Operations Ltd. and Sonol Israel Ltd. have filed an urgent petition with the Restricted Trade Practices Tribunal for provisional approval of their merger.
Outgoing Antitrust Authority director general Dror Strum rejected the companies’ request to merge, ruling that it increased concerns about price-fixing. He said a merger was liable to reduce competition and increase concentration in the sector. He said Dor Alon and Sonol had not proved that streamlining was only possible through a merger, and that no options were possible.
In their appeal, Dor Alon and Sonol claim that Strum’s decision meant the loss of an opportunity to carry out fundamental change in the fuel sector by breaking the triumvirate of Paz Oil Ltd., Delek - The Israel Fuel Corporation Ltd., and Sonol. They also claimed that a merger would increase competition by enabling Dor Alon to make a broad reduction in prices, and that a merged company could mount a serious challenge to Paz.
The petitioners claim that Strum’s sweeping rejection of the Dor Alon-Sonol merger without considering a conditional merger was unprecedented internationally.
Dor Alon also wants confidentiality imposed on the economic figures related to the merger. It wants a privilege order on the potential savings in variable costs from the merger.
Sonol is a private company owned by Granite Hacarmel Investments Ltd. (TASE:GRNT), controlled by Oded and Israel Borovich. Dor Alon Fuel Stations is a subsidiary of Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL), controlled by CEO David Wiessman, Shraga Biran, and Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY). Under the deal, Dor Alon would have paid $155 million for all of Sonol and its subsidiaries.
Judge Miriam Mizrahi scheduled an urgent hearing for November 24.
Published by Globes [online], Israel business news - www.globes.co.il - on November 16, 2005