Harel Insurance Investments and Financial Services (TASE: HARL) and credit card company Isracard (TASE: ISCD) have now obtained two of the three regulatory approvals required in order for Harel’s acquisition of Isracard to be completed. On Thursday, the Capital Markets, Insurance and Savings Authority wrote to Harel approving the acquisition, subject to certain restrictions. Harel and Isracard now await the hearing to which they have been summoned by the Competition Authority, the third regulator that needs to approve the deal. The Competition Authority has raised objections to it.
The Capital Markets, Insurance and Savings Authority stipulates that Harel Insurance and Harel Pensions and Provident Funds will not receive information from Isracard about its customers, or potential customers (leads), and will make no use of information originating from Isracard’s databases, apart from information obtained under the 2021 Financial Information Service Law.
As for the transfer of information in the other direction, from Harel to Isracard, this will require approval in advance and in writing from the Commissioner of Capital Markets, Insurance and Savings, including instructions on how the customer should approve the transfer.
Restrictions are also imposed on directors and company officers serving in both companies and on joint business activity.
The Capital Markets, Insurance and Savings Authority has also given a permit for the controlling shareholders in Harel to control Isracard’s insurance agency, again subject to restrictions on the transfer of information and on office holders serving in both entities.
Isracard will not be allowed to use Harel Insurance or Harel Pensions and Provident Funds offices, and operations must be kept separate.
Another matter raised by the Capital Markets, Insurance and Savings Authority was the loan extended by Harel group entities to Warburg Pincus to buy Max, a competitor of Isracard. Those dealing with the loan in the Harel group will not be allowed to be involved in the management of Isracard. The loan was transferred to Clal Insurance when the latter bought Max from Warburg Pincus.
In its notification to investors, Harel stated, "The company continues to act to obtain the last regulatory approval that has not yet been forthcoming, that of the Competition Authority, which is a precondition for the deal." As mentioned, the two companies have been summoned to a hearing. A few days ago, Harel extended the deadline for completion of the preconditions by a month, until the end of January.
Published by Globes, Israel business news - en.globes.co.il - on December 31, 2023.
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