On July 28, 2019 the Israeli Competition Authority (the “ICA“) published a new merger regulation draft (the “Draft“) and is seeking comments from the public. In the attached legal update, we describe the key features of the Draft. The Draft has two principal elements:
- An attempt to reduce the number of merger transactions which need to be reported to the Director General of the ICA (the “Director General“) in order to receive merger approval, by raising the sales turnover threshold above which such reporting is necessary. The Draft proposes to raise the threshold from NIS 10 million to NIS 20 million. That being said, the Draft also proposes new merger regulations which would expand the group of corporations whose sales turnovers will be taken into account for the purpose of calculating this threshold (by broadening the definition of the term “control”). This means that in practice, there is no certainty that raising the sales turnover threshold will result in an actual change in the number of merger transactions which must be reported to the Director General.
- A change to the way mergers are reported to the Director General through a change to the merger notice structure, including with regard to the scope of information that the parties are required to provide in the merger report, which the Draft expands very significantly.
At first glance, the proposed amendment in the Draft for increasing the sales turnover threshold may result in the lessening of the regulatory burden. However, the other proposed changes included in the Draft (which are described in the full version of the legal update) lead to the conclusion that the proposed amendment may significantly increase the regulatory burden both with regard to the increased scope of transactions for which the Director General’s approval will be required, and with regard to the increased scope of the disclosure obligation. These outcomes would be contrary to the regulatory relief objective of Amendment 21 of the Economic Competition Law, 5748-1988 which was passed earlier this year.
Please find the full legal update here (Hebrew)
