Both companies decided not to appear at the hearing to which they were invited by the Authority to express their position, and they came to the conclusion that the chances of approval of the merger were slim anyway. The companies informed the Authority about this.
This is the third merger in the food and retail sector to be removed from the chapter this year due to the opposition of the competition authority. The Authority objected to Strauss’s purchase of the Weiler farm tofu producer due to the fear of blocking the entry of additional competitors into the field as a result of the deal, as well as fear that the merger would prevent Weiler from entering the field of milk substitute drinks in which Strauss is active through the merger with Alpro.
After the deal was rejected, the Green Lantern Fund managed by Richie Hunter signed a deal to buy 50% of the Weiler network, and entered Strauss Shoes, although Strauss bought 51% of the shares in the original deal. Green Lantern also owns Gad Dairies together with Ezra Cohen and Discount Capital, so while it benefited from the disqualification of a deal by the Authority, it suffers from the disqualification of another deal, its own.
The food sector, therefore, receives special attention in the Authority in light of the increase in the cost of living and the central role of the food market in rising prices. Disallowing three merger transactions in the food sector in less than a year is a rare event, and the Authority usually rejects one merger per year. On the other hand, the competition commissioner Michal Cohen did not prevent Persal from strengthening this year with the purchase of Dan Deal, a large stock chain that it purchased for NIS 109 million. Although this is an area in which Shufersal does not play, and this was a main motive for the approval, the purchase strengthens its already enormous power in the retail market and in its power relations with suppliers.