The Bank of Israel on Thursday granted a permit to Clal Insurance Enterprise Holdings Ltd. to take control of Israeli credit card company Max from its controlling shareholder US private equity firm Warbus Pincus LLC in a deal worth about NIS 2.5 billion ($690 million).
Central bank governor Amir Yaron and Supervisor of Banks Yair Avidan said in a statement that following the completion of the review process and the approval by the Israel Competition Authority, the control permit was given in consultation with the licensing committee.
The control permit was granted to Clal Insurance after it entered into a binding agreement in August with Warburg Pincus, which has controlled Max since 2019, when it acquired it from Bank Leumi le-Israel Ltd. The control permit stipulates a number of conditions and limitations. Among other things, it was determined that the minimum holding of Clal Insurance in Max will not be lower than 30%.
Max will continue to be supervised by the Banking Supervision Department at the Bank of Israel in order to ensure its stability and to maintain fair treatment of its customers, similar to the supervision of other banks and acquirers in Israel, the central bank said.
Earlier this month, Israeli insurer Menora Mivtachim Holdings Ltd. joined the bidding to buy Isracard in a deal valuing the country’s largest credit card company at NIS 3.07 billion ($846.3 million). Menora Mivtachim is offering to buy a 32% controlling core stake in Isracard at a company valuation of NIS 3.07 billion, or NIS 15.34 ($4.23) a share.
That’s after Israeli insurance and investment group Harel Insurance Investments & Financial Services Ltd. made an offer at the beginning of January to buy Isracard in a deal valuing the credit card company at NIS 2.7 billion ($744.2 million).
In view of the recent offers of insurance companies seeking to take over credit card companies, Finance Minister Bezalel Smotrich last month announced plans to appoint a ministerial committee tasked with examining whether there is an issue with large institutional bodies having control of debit card firms.
The committee, which is expected to submit its recommendations in the next few weeks, will be set up to assess the “potential impact of recent developments in the ownership structure of the separated credit card companies,” the Finance Ministry said.