JERUSALEM, Jan 10 (Reuters) - A decision on whether to approve Mizrahi-Tefahot Bank’s $400 million purchase of Union Bank of Israel should take four months, the Israeli competition regulator said on Wednesday.
Antitrust Authority Commissioner Michal Halperin said there were still questions surrounding the merger of Mizrahi-Tefahot, Israel’s third largest lender, with Union, the sixth biggest.
“The merger will be looked at until we have an answer for every question,” Halperin told the annual Israel Business Conference, adding that it would likely take four months.
“As long as it doesn’t harm competition we will approve it,” she said.
Mizrahi-Tefahot, with a market value of 15.3 billion shekels ($4.5 billion), said it had agreed to buy Union, with a market value of 1.4 billion shekels, in an all share deal.
It said the merged bank would be better positioned to compete with the top two lenders, Hapoalim and Leumi , which together control 60 percent of the market.
The banking regulator supports the merger, saying it would create a stronger competitor for the two dominant lenders.
But the move is opposed by Finance Minister Moshe Kahlon, Economy Minister Eli Cohen and several other politicians, who say removing a bank would hurt competition across the system.
The head of Israel’s parliamentary finance committee in November told the Bank of Israel, or central bank, that it could be stripped of its banking supervisory role over its support of the merger.
Hedva Ber, the supervisor of banks at the Bank of Israel, said the decision should be left to the two regulators. “Do we need two more ministers involved? Absolutely not,” she told the conference.
“We have to understand that the number of players in the banking system is not the only consideration,” she said.
Under the share-swap deal, Mizrahi-Tefahot will buy the 75 percent held by Union’s controlling shareholders, including Yeshayahu Landau and Shlomo Eliyahu Holdings. It will then seek to buy the remaining 25 percent through an offer to the public.
$1 = 3.4285 shekels Reporting by Steven Scheer and Ari Rabinovitch; Editing by Edmund Blair