Harel Insurance Investments and Financial Services (TASE: HARL) has informed credit card company Isracard (TASE: ISCD) that it does not intend to continue to act to obtain approval to acquire Isracard, putting an end to the acquisition deal.
Last week, the Competition Authority told the two companies that it was opposed to the deal. Harel has now announced that its board of directors has decided that the company should not exercise its right to extend the deadline for fulfilling the pre-conditions for the merger with Isracard. In other words, Harel will not appeal against the Competition Authority’s decision.
Harel explained the decision by the long period of time the appeal process would take, after a year had already gone by since the deal with Isracard was signed.
"We believed in the Isracard deal and stuck by it even after the war broke out," said Harel vice chairperson Ben Hamburger. "Two of the three regulators approved the deal and welcomed it, and we thank them for their confidence in the group. Unfortunately , the Competition Authority decided to oppose the deal, not long after if approved the Clal-Max merger, an essentially similar deal.
"We are deeply disappointed at the Competition Authority’s decision. We believed that the merger between the companies was good for Harel and its shareholders, and of course that it would be advantageous for consumers, and would generate competition with the banks, thus helping to reduce the cost of living in Israel. Unfortunately, the Competition Authority ignored the clear advantages to the public in the deal, and focused on merely theoretical risks, leading it to make a fundamentally mistaken decision."
Hamburger said that an appeal against the decision would have tied up the funds earmarked for acquiring Isracard for a year to eighteen months, during which time it would not be able to use the money for other investments. "We therefore made the painful decision to forego an appeal and to direct our resources elsewhere," Hamburger said.
"Today, Harel is the most liquid insurance and financial group, by a huge margin from its competitors, with liquid resources in the holding company available for investment amounting to NIS 3.2 billion. This liquidity will enable us to take advantage of opportunities in the capital market in the coming year and to carry out value investments in Israel and around the world that will diversify the group’s sources of earnings," Hamburger added.
Published by Globes, Israel business news - en.globes.co.il - on January 30, 2024.
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