After a year of delays and months of waiting for a decision, the Israel Competition Authority announced today that it is requiring Union Investments, owned by the Horesh family and part of the Union - Harel consortium, which seeks to acquire Cal-Israel Credit Cards, to sell its 35% stake in the Super-Pharm chain as a condition for proceeding with the deal. This is a dramatic demand that follows the failure of compromise attempts by Union with the Competition Commissioner, Adv. Michal Cohen.
The Competition Authority has concerns about the credit cards issued by Cal. The concern is that the Union-Harel Group, which seeks to buy Cal from Discount Bank and First International Bank for NIS 4 billion, would gain access to vast amounts of data about Shufersal, which owns the competing BE pharmacy chain. In practice, nearly all data from consumers at these chains would flow to the Union-Harel Group.
"Cal has access to a massive database containing details of all transactions made using the payment cards it issues or operates, combined with the cardholder's personal and demographic information," the Competition Authority stated in its decision. For instance, this allows for insights into the volume of credit card transactions and the specific types of customers frequenting a business on a daily basis, broken down by demographic segments. This raw data also allows processing and segmentation based on different characteristics.
The Competition Authority explains that the Commissioner had previously considered approving the merger subject to conditions prohibiting the transfer of data from Cal to Union. But despite lengthy negotiations, the parties failed to reach an agreement ensuring compliance with this condition including the appointment of an oversight monitor. "Gaps" emerged between the parties regarding, among other things... "Regarding the scope of the prohibition," the Competition Authority's announcement explains.
It remains unclear whether this decision will ultimately derail Discount Bank’s planned sale of Cal. Under the law implementing the Strum Committee’s recommendations, the bank is required to divest its 72% stake in Cal. However, it recently sent a letter to the Bank of Israel and the Ministry of Finance stating that it does not expect to find other domestic buyers or succeed in listing Cal on the Tel Aviv Stock Exchange (TASE) (due to anticipated opposition from First International Bank), and that there is a lack of interest from abroad too. Thus the bank is seeking relief regarding the divestment mandate beyond simply requesting a more flexible timeline.
Capital market figures expressed frustration with the decision. "It has been public knowledge for 12 months that George Horesh owns Super-Pharm. There is no new information here that took the Commissioner by surprise. So why didn't she make this decision a month after Discount and Union-Harel signed the deal? Look at the uncertainty this has created for Cal and, by extension, the entire financial system. It reflects a very narrow perspective, focusing on nuances that, in my view, are irrelevant."
"Taking a broader view, one has to ask. Where is the promotion of competition? After all, the Strum Law aimed to have banks divest from credit card companies to foster greater competition. Yet here she is, scuttling a deal and leaving the bank empty-handed. This is effectively throwing a wrench into the works of competition within the Israeli financial sector. After all, who has the kind of money needed to buy Cal? Primarily giant corporations likely with a retail connection. So, to whom will the banks sell Cal? And who would be willing to endure another year of such interminable proceedings?"
Discount Bank said it is studying the decision.
Published by Globes, Israel business news - en.globes.co.il - on September 22, 2026.
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