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Court approves merger of Israel’s Mizrahi, Union banks, overruling previous ban

Deal would see Mizrahi-Tefahot swallow up smaller bank; move was disqualified last year over anti-trust issues but appeals tribunal says not enough evidence to block takeover

A branch of Mizrahi-Tefahot Bank (Youtube screenshot)
File: A branch of Mizrahi-Tefahot Bank (Youtube screenshot)

The Jerusalem Competition Tribunal on Thursday approved the merger between two major Israeli banks, overruling a previous decision by the Israeli Competition Authority against the move.

Plans for the merger between Israel’s fourth-largest bank, Mizrahi-Tefahot, and Union Bank, the country’s sixth-largest, were first announced in November of 2017.

Last year the Israeli Competition Authority (formerly the Antitrust Authority) barred the deal, saying it would harm the already limited competition over private customers in the banking sector.

Finance Minister Moshe Kahlon and Economy Minister Eli Cohen had also both been firmly against the merger.

But on Thursday, Jerusalem tribunal Judge Oded Shaham overturned that decision, saying he had found no evidence that the merger would hurt competition.

The court did accept the assessment by the acting director general of the ICA that competition in the diamond business could be harmed and returned the matter to the acting director general, to consider setting terms that would prevent such damage.

Under the merger Mizrahi-Tefahot would absorb Union Bank, known in Hebrew as Bank Igud, and close its branches. Union Bank employees fearing for their jobs have protested the merger and on Thursday said they would hold a strike until Sunday.

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