The Committee on Increasing Competitiveness in the Economy, also known as the Concentration Committee, completed its work yesterday and finalized its recommendations. The guiding principles of the committee's conclusions were presented to Prime Minister Benjamin Netanyahu, Minister of Finance Yuval Steinitz, and to Governor of the Bank of Israel Prof. Stanley Fischer. The conclusions will be made available to the public in the next few days.
The Ministry of Finance intends to present the recommendations to the government within a month, and to complete the legislative process in the Knesset before the Passover Holiday (April 6), at which time the Knesset enters recess.
The committee's interim recommendations require that controlling owners of a significant non-financial enterprise who also control a significant financial entity, must sell one or the other within four years.
A significant financial corporation is defined as an entity that manages assets of more than NIS 50 billion. A significant non-financial enterprise is defined as an entity with annual revenue of more than NIS 8 billion, or a balance sheet footing of more than NIS 20 billion.
If the recommendations are accepted, IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner, is expected to sell Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) and Delek Group Ltd. (TASE: DLEKG), which is controlled by Yitzhak Tshuva, will sell The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and Excellence Investments Ltd. (TASE: EXCE). However, there is a possibility that if Phoenix sells Excellence, Delek will no longer need to sell Phoenix.
According to market estimates, it is quite possible that Minister of Communications Moshe Kahlon will be made responsible for the adoption of the Concentration Committee's recommendations. Following the cooperation between the Ministry of Finance and the Ministry of Communications, which brought about significant changes in the telecommunications industry, mainly by breaking up the mobile companies' oligopoly, it is becoming more and more likely that Kahlon will be able to successfully lead the move. Netanyahu currently has great faith in Kahlon, who is also on good terms with Steinitz, which is likely to be considered positively by both parties.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012
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