The Israel Antitrust Authority has gotten its message across - Electra Consumer Products' (TASE: ELEK) acquisition of Golan Telecom Ltd. will be approved, but only on difficult terms. As reported by "Globes," the Antitrust Authority has decided not to ignore the statements by designated Golan Telecom chairman Gil Sharon to Galei Tzahal (Army Radio) about cellular prices in Israel being too low, and hinting that they were likely to rise. The Antitrust Authority is making approval of the acquisition conditional on the company offering marketing bargains with improved terms to its customers every year.
As part of these terms, Golan Telecom will offer the public at least one bargain campaign of at least three weeks' duration in each the next three quarters. The bargains must include a two-year cellular package for less than NIS 30 per line on terms equal or better than those of the current available NIS 25 package.
After a comprehensive examination and hesitation, the Antitrust Authority decided not to take personal punitive action against Sharon for alleged price fixing, as some believed it would following his remarks, preferring the benefit and competition that the acquisition will bring to the market. For the Antitrust Authority, it is more important to let the deal go through, because it supports its stance and that of the Ministry of Finance budget department in favor of selling Golan Telecom to an concern outside the cellular market, rather than having it merge with one of the existing players in the market.
The Antitrust Authority therefore decided to promote the deal. Had it not been for Sharon's comments to Army Radio, the acquisition would have been approved over a month ago. Following the interview, the Antitrust Authority began a comprehensive examination, including conversations (not questioning) and checks with Electra Consumer personnel and Sharon himself, as well as email correspondence between the parties on the deal, in order to make sure that Electra Consumer did not have a plan that would lead to price fixing and higher prices.
Advocates Chaim Friedland, Lior Porat, and Avner Finkelshtein from the Gornitzky & Co. law firm represented Golan Telecom in the deal.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 9, 2017
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