Electra Consumer Products' (TASE: ELEK) acquisition of Golan Telecom Ltd. will require approval from the Committee to Reduce Concentration. Last December, Elco Holdings Ltd. (TASE: ELCO), Electra Consumer's parent company, was classified as a major non-financial corporation, because its 2015 sales turnover exceeded NIS 6 billion. Obtaining the committee's approval is not expected to present an obstacle to completing the deal, but approval is still required.
When a company on the list of major non-financial corporations requests licenses or franchises for critical infrastructure, or seeks to acquire a privatized government company, the Law for Promotion of Competition and Reduction of Concentration requires the regulator to consult the Committee to Reduce Concentration concerning the consequences for the economy as a whole of the request or acquisition.
The Ministry of Communications, which is responsible for regulating the communications market, will therefore have to consult the Antitrust Authority before approving Electra Consumer's acquisition of Golan Telecom. The director general of the Antitrust Authority chairs the Committee to Reduce Concentration.
In the previous case, when the Antitrust Authority opposed Cellcom's acquisition of Golan Telecom, the Ministry of Communications adopted the Antitrust Authority's position, even though the Ministry of Communications director general believed that the deal would benefit the communications market. The Ministry of Communications eventually issued an opinion against the deal.
The Antitrust Authority's view therefore becomes the guideline for government ministries, thereby rendering the ministries' professional opinion superfluous to some extent.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 13, 2017
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