The sale of CAL Israel Credit Cards to the Union-Harel group for NIS 4 billion collapsed last month, though it is not definitively "dead." However, once it became clear that the deal's prospects had all but vanished, a wave of interested parties emerged, looking to acquire CAL.
One of these entities is insurance company Ayalon (TASE: AYAL), controlled by WeSure Global Tech (TASE: WESR) (59%) and managed by Sharon Reich. Ayalon Insurance is a relatively small player in the insurance sector; consequently, it believes that if it makes significant progress in a deal with Discount Bank -which holds a 72% stake in CAL and is required to sell it under the Strum Law-its chances of securing approval from the Competition Authority will be better than those of the Union-Harel consortium.
Initial interest only
Wesure Global Tech is currently in the process of acquiring provident fund manager Altshuler Shaham Finance (TASE: ALTF). Although Ayalon is ostensibly a separate entity, it is difficult to predict how the Competition Authority will view the situation. Nevertheless, some market observers believe Ayalon could successfully argue that its small market share in the insurance industry presents an opportunity to boost competition through the acquisition of CAL.
It should be emphasized that at present this is only a matter of an initial expression of interest. Discussions have taken place between Discount Bank, led by Avi Levy, and Ayalon to explore the feasibility of such a deal. Formally, the agreement to sell CAL to Union-Harel expires this coming November, while the statutory deadline for Discount Bank to sell CAL is April 2027. While these conditions strengthen Harel's position, other potential bidders could still emerge. Meanwhile, Discount Bank’s management, which has embarked the merger of Mercantile Bank, has hinted over the past week that various parties from Israel and abroad have also expressed interest in CAL.
The major insurance companies have long sought to acquire a credit card company. The first to succeed was Clal Insurance, which acquired Max, the smallest of the credit card firms. The bid by Harel for CAL, which tried to buy Isracard two years ago, was effectively blocked by the Competition Authority because of concerns of possible leakage of data from CAL to do with health insurance, a market that Harel dominates. Menora Mivtachim attempted to acquire Isracard and came close to succeeding, only to have the deal snatched away by Delek Group in the final stretch.
Regarding CAL, the consortium comprising Union (the Toyota importer and a shareholder in the Super-Pharm chain) and Harel faced an unexpected demand from the Competition Authority: they were required to sell Union’s stake in Super-Pharm. This requirement stemmed from the fact that CAL issues credit cards for Shufersal, which owns Be, Israel's second-largest pharmacy chain. This demand ultimately scuttled the deal.
Market sources estimate that there remains a theoretical chance, however slim, that the Union-Harel deal could be revived. The group could, for example, restructure the deal and bring in additional business partners; this would dilute Union’s holdings sufficiently to alleviate the Competition Authority's concerns regarding its stake in Super-Pharm. However, the likelihood of this is low, and the statutory timeframe is a critical factor: Discount Bank must either sell its shares in CAL or else float the company on the stock exchange by April 2027, but since the minority shareholder partner in CAL, First International Bank, is not in favor of it, a flotation is practically impossible.
A stable financial pillar
Ayalon has a market cap of NIS 4.9 billion and is controlled by digital insurance company WeSure (holding a 59% stake). The company has diverse operations spanning general insurance, life insurance, and health insurance, alongside extensive capital market activity. CAL could serve as a strong, stable financial pillar for the company. Credit card companies are attractive to insurers because of the nature of their business cycles; people use their credit cards consistently throughout the year, following similar spending patterns around the Jewish holiday seasons. Furthermore, when people travel abroad, or shop on foreign websites, during quieter periods, these companies benefit from fat currency exchange commissions.
What remains unclear at this stage is the valuation at which CAL will be sold. Some in the capital market estimate that its current value is significantly lower than it was at the time of the aborted deal. This is because, since that deal fell through, CAL has lost the "Fly Card" franchise for issuing credit cards for members of El Al’s frequent flyer program to Isracard. CAL, led by Yafit Griani, has put up a fight with a new travel-oriented card called "Fly All," but the prevailing view is that a goldmine has been taken away from the company; consequently, potential buyers may seek to lower the acquisition price.
Published by Globes, Israel business news - en.globes.co.il - on October 14, 2026.
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