The Antitrust Authority today officially announced that it was considering making the merger between the Mega and Yeinot Bittan supermarket chains contingent on the dismantling of Yeinot Bittan's partnership with Bikurei Hasade and the sale of 10 branches by Yeinot Bittan. The Antitrust Authority will make its final decision in the course of a hearing with the parties. Yeinot Bittan has anticipated these conditions, and has begun preparing for them.
Owned by Nurit and Nahum Bittan, Yeinot Bittan won a tender for the acquisition of the Mega chain, a deal approved by a crushing majority of Mega's creditors. Yeinot Bittan is slated to pay NIS 325 million for Mega and NIS 130 million more for its inventory. The acquisition was also approved by the court, and awaits approval from the Antitrust Authority.
In its announcement, the Antitrust Authority said that it had completed its geographic competition survey. The Antitrust Authority gave the Mega trustees and Yeinot Bittan management a list of nine areas in which it was considering requiring the sale of stores as a condition for the merger, the precise particulars of the stores, and the mechanism for the sale. 10 branches are involved.
The Antitrust Authority also announced that it intended to order the dismantling of Yeinot Bittan's partnership with Bikurei Hasade in the Bikurei Hashikma fruit and vegetable marketing company. The Antitrust Authority previously order the dissolution of a similar partnership between Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) and Bikure Hasade, forcing Rami Levy to buy his partner's share in the company. Yeinot Bittan is expected to do the same thing.
Another expected condition could create problems for Yeinot Bittan. The Antitrust Authority announced at the same time that it was considering making its approval contingent on either Yeinot Bittan or Bikurei Hasade, which are currently located on the same site, moving to new quarters. If the Antitrust Authority does not withdraw this condition, it will require Yeinot Bittan to make immediate logistics preparations for marketing fresh produce at a time when it is very busy with its merger with Mega, which will be very difficult. It cannot be ruled out that Yeinot Bittan will request and receive permission from the Antitrust Authority to delay the implementation of this condition in order to allow proper preparation for it.
"At this stage, the concern is theoretical, because the parties have not yet exercised their right to a hearing. The concerns and conditions were presented to the parties to the deal, and in the wake of arguments made by the parties, additional checks are taking place, the completion of which is expected next week," the Antitrust Authority's secretary said. Avocates Nurit Tabib and Ariel Natan from the Central District State Attorney's Office (civil) represented the Antitrust Authority.
The Antitrust Authority also said in its announcement that other concerns raised in a previous announcement to the court about Internet sales and concern about the accumulation of market power against suppliers are not being pursued at this stage.
Addressing the new conditions and the agreement signed by Yeinot Bittan with Mega's workers, one of Yeinot Bittan's competitors said, "After all these difficulties, they want it to be cheap? They're putting seven tons on its back, and now they tell it we'll see who wins the race. It wanted to make a deal, and now they're piling up the difficulties."
In any case, this merger is expected to go through, and Yeinot Bittan will eventually become Israel's second largest supermarket chain, with a NIS 5 billion annual sales turnover.
Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2016
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