Asia and Oceania


Hong Kong
New Zealand



European Union (EU)
Czech Republic



North Macedonia
Slovak Republic
United Kingdom
North and Central America
Costa Rica
Trinidad & Tobago
United States
South America

Niva Barg Livnat
Head of the Competition and Antitrust

Tel: +972-3-6103635

Liat Hertzka

Tel: +972-3-6103190

Tal Arad
Senior Counsel

Tel: +972-3-6103654

No new regulation adopted or proposed

Note that relevant regulations may be changed before your contemplated transaction is completed. and our national experts keep information on regulations up to date and even provide alerts on adopted or proposed changes that have not come into force yet but may come into effect before the transaction is completed. When this field is green, we have no knowledge of such imminent changes to the relevant regulations.
Confirmed up-to-date: 30/05/2023

(Content available free of charge at - sponsored by Meitar)

Relevant legislation and authorities

1) Is a merger control regulation in force?

Yes. Merger control regulation is contained in Chapter C of the Israeli Economic Competition Law, 5748-1988 ("Competition Law").

2) Which authorities enforce the merger control regulation?

The Israeli Competition Authority ("ICA") enforces the Competition Law. The ICA conducts the review of merger transactions that are subject to the Competition Law, and the General Director of the ICA can either approve a merger, approve a merger subject to certain conditions or prohibit the merger. A decision to approve a merger, including approval subject to certain conditions, is subject to prior consultation with the Exemptions and Mergers Committee (a committee composed of both public and government representatives). In case the field of activity of the merging companies falls under the jurisdiction of one of the Governmental Ministries, the ICA has to notify such Ministry of the merger by sending it a copy of the merger notifications. 

The decision of the ICA with respect to a merger is subject to appeal to the Competition Tribunal (the “Tribunal”). For additional details please refer to topic 50. 

3) Relevant regulations and guidelines with links:

The merger control is contained in Chapter C of the Competition Law. Links to the relevant legislation, guidelines and forms are listed here:

Original Israeli version

Unofficial English translation

חוק התחרות הכלכלית, התשמ"ח-1988

Economic Competition Law, 5748-1988

(Full and updated version as of January 10, 2019. Unofficial, non-binding translation)

תקנות ההגבלים העסקיים (מרשם, פרסום ודיווח על עסקאות), תשס"ד-2004


Restrictive Trade Practices Regulations (Registration, Publication and Reporting of Transactions), 5764 – 2004 

(regarding the calculation of turnover for the filing thresholds, and on the forms for Notification of Mergers - translation into English not available)

טפסי הודעות מיזוג באתר רשות התחרות

English merger notification forms at ICA's website 

הנחיות הממונה על הגבלים עסקיים לגבי הליכי הדיווח והבדיקה של מיזוגי חברות לפי חוק ההגבלים העסקיים, התשמ"ח-1988

Guidelines of the General Director of the Israel Antitrust Authority For Reporting and Evaluating Mergers Pursuant to the Restrictive Trade Practices Law, 1988

גילוי דעת 1/11 בעניין הנחיות לניתוח תחרותי של מיזוגים אופקיים  

Public Statement 1/11 in the matter of Guidelines for Competitive Analysis of Horizontal Mergers (translation into English not available)

גילוי דעת 2/11: הנחיות בדבר תרופות למיזוגים המעלים חשש סביר לפגיעה משמעותית בתחרות

Public statement 2/11: Guidelines Regarding Remedies for Mergers that raise Reasonable Concerns of Significant Harm to Competition

כללי ההגבלים העסקיים (פטור סוג לכבילות נלוות למיזוגים), תשס"ט-2009

Antitrust Rules (Block Exemption for Restraints Ancillary to Mergers) ,5769-2009 (translation into English not available)

גילוי דעת 2/14 בעניין חשיפת מידע טרם עסקה בין מתחרים


Public Statement 2/14 in the matter of Information Disclosure between Competitors during Due Diligence Process (translation into English not available)

חוק לקידום התחרות ולצמצום הריכוזיות, התשע"ד-2013

Law for Promotion of Competition and Reduction of Concentration, 5774-2013 in ICA's website

(Full and updated version as of December 11, 2013. Unofficial, non-binding translation)

תודולוגיה לבחינת ריכוזיות כלל-משקית, דו"ח סופי 3.3.2019.

Methodology for Evaluating Economy-Wide Concentration

The final binding policy was published on March 3, 2019 in Hebrew only. Translation into English not available.

4) Does general competition regulation apply to mergers or ancillary restrictions?

There is a specific Block Exemption covering restrictions that are typically ancillary to merger transactions Antitrust Rules (Block Exemption for Restraints Ancillary to Mergers), 5769-2009 including non-compete, supply assurance by the Seller, non-solicitation etc. Restrictions not covered by the Block Exemption should be notified to the ICA as part of the merger notification form in order to receive approval.  

5) May an authority order a split-up of a business irrespective of a merger?

The General Director of the ICA can initiate proceedings before the Tribunal, seeking for the Tribunal's order that a monopoly should be divided, or should divest certain activities. According to the Competition Law, The Tribunal will order so, only if it has found that as a result of the existence of a monopoly, competition is significantly harmed or the public is significantly harmed, and there is no effective way of preventing such harm by regulation of the monopoly's operations but only by division of the monopoly into two or more separate business corporations. 

It should be noted however, that so far, this has never been applied.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Some mergers are subject to approval by specific regulator or regulators. These include, for example, the Ministry of Communications, the Ministry of Energy or The Supervisor of Banks.

However, any merger that meets the thresholds (see topic 14 below) will be subject to approval by the ICA and will be reviewed by it independently, regardless of any other approvals required from other regulators.

In cases involving allocation of rights in essential infrastructures to concentrated entities, the relevant regulator/s must take into consideration either the General Director's opinion or the Concentration Committee's opinion, regarding either Competition considerations within the specific relevant market, or Economy-Wide Concentration considerations, respectively, according to the Law for Promotion of Competition and Reduction of Concentration, 5774-2013 and according to the Methodology for Evaluating Economy-Wide Concentration published by the ICA. 

Foreign Investment Control

There is no central regulatory body in Israel that deals with the regulation of foreign investment, and Israeli regulation in this area is decentralized, with each body or government ministry regulating the issue independently. 

There are three main bodies that regulate foreign, as well as, local investment in Financial markets: the Capital Market Authority, which supervises, among other things, insurance companies and investment houses; The Securities Authority, which supervises mutual funds and investments in the stock exchange and the Bank of Israel, which supervises Commercial Banks in Israel. There have been instances of blocking foreign investments in Israel due to considerations such as corporate governance or financial strength.

In addition, with respect to privatization of, or investment in, governmental companies, the Governmental Companies Law, 1975, empowers the Prime Minister, Minister of Finance and Minister of Defense to issue a decree acknowledging the existence of essential interests in a governmental company, which can restrict foreign control over such company, inter alia, due to national security considerations.

The Telecommunications (Bezeq and Broadcasting) Law, 1982, requires an approval for the transfer of control in an essential telecommunications service based, inter alia, on national security considerations, and allows for the Prime Minister and the Minister of Telecommunications to determine that control will only be granted to an Israeli citizen. 

An advisory committee has been established, to examine national security issues as part of the approval process for foreign investments. The advisory committee is headed by the chief economist of the Ministry of Finance, and has representatives from the Ministry of Defense and the National Security Council. The committee aims to help regulators integrate national security considerations in what are primarily financial and economic considerations in the approval process of foreign investments.  The regulators that can consult with the committee according to the Government decision establishing the committee are various regulators, such as the bank of Israel, Israel Securities Authority, Ministry of Energy, Ministry of Transport, national infrastructure and road safety, Ministry of Communications, etc., but do not include the Israeli Competition Authority. 

7) Are any parts of the territory exempted or covered by particular regulation?


Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the filing thresholds are met.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

Yes, the Competition Law defines a "merger of companies" as:

  1. Acquisition of the main assets of a company by another company; and/or
  2. Acquisition of shares in a company by another company which gives the acquiring company more than a quarter of the par value of the issued share capital; and/or
  3. Acquisition of more than a quarter of the voting power in the acquired company; and/or
  4. Acquisition of power to appoint more than a quarter of the board of directors; and/or
  5. Acquisition of participation in more than a quarter of the company's profits.

"Acquisition of more than a quarter" also refers to instances in which a purchaser, with prior holdings of a certain right in the target will exceed either 25% or 50%, e.g.: if the purchaser held 20% in the target and now purchases additional 6%, this will be regarded as a merger, since its total holdings will exceed 25% post-merger; or if the purchaser held the right to nominate a third of the directors, and post-merger will have the power to nominate two thirds of the directors, this also will be considered a merger. However, if prior to the merger the acquiring company already holds more than 50% of all of the rights in the target company, then any additional purchase would not constitute a merger. 

The acquisition of the main asset of a company refers to the economic aspect of a merger, i.e., whether the transaction effectively transfers an asset that constitutes a significant element in the selling company’s competitive ability, in a distinguished line of business, thus the focus is on substance rather than form. Examples are a distinct line of business, a trademark through which the company sells its products, etc. 

An acquisition may be direct or indirect or by means of rights granted by contract. 

A series of transactions that each, individually, does not meet any of the criteria mentioned above, but consist of the same parties and result in at least one of the abovementioned criteria being met, will be held de facto as one transaction and should be notified to ICA if the filing thresholds are met. 

The definition of a merger according to the Competition Law also has a broader aspect, which relates to other situations in which the acquirer receives post-merger significant influence over the target company. There is no closed list of these situations; however, one example would be the acquisition of less than 25% of the company’s rights along with significant rights, e.g., the right to appoint senior management and veto right over the company’s business plan or where the rest of the shares are divided between many other holders. 

10) Is "change of control" of a business required?

No. Any purchase of more than 25% of any kind of rights in the business constitutes a "merger", regardless whether control is acquired. Also see topic 9.

11) How is “control” defined?

The Israeli Competition Law defines “control” as: "holding more than half of one of the following means of control: 

  1. Voting rights at the general meeting of the company or in a corresponding body of another corporation;
  2. The right to appoint directors of the corporation."

12) Acquisition of a minority interest

Acquisition of a minority interest of more than 25% of any of the rights of the acquired party will be regarded as a "merger" and therefore can still be subject to merger control if the filing thresholds are met. There are also other circumstances under which an acquisition of an even smaller minority interest will be subject to merger control. For details see topic 9. 

13) Joint ventures/joint control – which transactions constitute mergers?

Any transaction that meets the criteria of the "Merger" definition and meets the thresholds, should be filed, regardless how many persons may have control in the acquired company.

There are situations where there is more than one purchaser and each purchaser on its own does not acquire more than 25% of the rights in the target company and the acquisition will still be regarded as a merger according to the Competition Law. This will be the case, inter alia, if the purchasers are contracted between themselves in a voting agreement to coordinate the exercise of their rights in the target company or where an acquisition of more than 25% of the company is performed by a group of individuals (each not individually meeting the 25% criteria) who cooperate with each other on a regular basis in their businesses.

The decision whether a joint venture constitutes a merger or a restrictive arrangement is not clear cut. The fundamental distinction is between a joint venture that facilitates holdings in an existing activity of any of the parties to the joint venture and therefore will be classified as a merger, or a joint venture which creates a new activity and, therefore will be classified as a restrictive arrangement.  There are additional considerations which affect the classification, inter alia, the nature and strength of the affinity created by the parties to the joint venture, the level of integration created by it, the stability of the joint venture over time, etc. 

A marketing joint venture will almost always be classified as a restrictive arrangement, as it entails coordination of the commercial activity of the parents of the joint venture. 

When a joint venture is classified as a merger, the approval by the ICA will be unlimited in time, whereas an exemption for a restrictive arrangement by the ICA, will be granted for a limited period of time, most likely ranging between 3-5 years, depending on the circumstances. It should be noted that in certain circumstances parties to a joint venture classified as a restrictive arrangement will be able to conduct a self-assessment process under certain Block Exemptions, and hence avoid filing altogether. 

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger notification must be filed if:

The combined total annual sales turnover (during the fiscal year preceding the merger) in Israel of the merging companies, exceeds the amount of NIS 367,930,000; and the individual sales turnover in Israel of at least two of the merging companies is no less than NIS 20 million;

A merging company’s turnover is the total turnover of all the entities under the control of the “ultimate parent entity" of the party filing the notice (for a definition of "control", please see topic 11).

Also see topic 21 about local nexus requirement.

b) Market share thresholds

A merger notification must be filed if:

One of the merging companies (or a person controlling or controlled by it) is a monopolist; or if as a result of the merger, the merging companies will create a monopoly.

A monopolist is defined under the Competition Law as a person who holds a market share of more than 50% in the total production / sale / marketing / purchase of any goods or services in Israel. 

Also see topic 21 about local nexus requirement and topic 23 about exemption from notification requirement in case there is no overlap of activities.

c) Value of transaction thresholds


d) Assets requirements


e) Other


15) Special thresholds for particular businesses

The filing thresholds indicated in topic 14 apply to all transactions. 

Note, however, there are special rules on the calculation of turnovers for particular businesses in certain industries, which have the effect of lowering the applicable turnover thresholds (see topic 17).  

16) Rules on calculation and geographical allocation of turnover

The turnover must be calculated in accordance with accepted accounting principles, i.e., it shall include the value of sales according to audited financial statements, without value added tax and without purchase tax. Ideally, these should be consolidated financial statements of the last financial year for the Ultimate Parent Entity of the relevant party to the merger. 

In the event of permanent changes to the businesses of the undertakings concerned (such as acquisitions or divestments) which are not already (fully) reflected in the accounts of the last fiscal year before filing, it is common practice to notify and adjust the turnovers accordingly. 

The relevant turnover for calculation is the company's turnover generated in Israel.

Is the seller/seller's group turnover relevant in a standard acquisition of sole control?

In general, the seller's sales turnover is relevant to the examination of the turnovers threshold, and should be taken into account as part of the target's turnover. 

However, in merger transactions following which the seller is completely separated from the target – whether in case it sells all of its rights in a target company, or whether it sells in whole a business activity owned by him in case of sale of assets - it is not necessary to include the seller's sales turnover with respect to its business which is not part of the transaction. Therefore, the ICA's position is that in these cases it is possible to consider, for the purpose of calculating the sales turnover of the acquired party in the merger, only the relevant sales turnover relating to the activity sold, or the sales turnovers of the company sold. This position of the ICA refers only to situations in which all connection between the seller company (including any person/company affiliated with it) and the activity sold, are fully detached. Therefore, in case the seller will continue to provide services to the target, or if consideration will include an earn-out component, the turnovers of the seller will be taken into account as part of the target's turnovers.

Similar criteria will apply to the market share threshold, so that in case of full detachment from the target, seller's market shares will not be relevant to the market shares threshold – see topic 20(3). 

17) Special rules on calculation of turnover for particular businesses

For the purpose of calculating the "sales turnover" of financial entities, the total income from current activities must be taken into account (commissions, dividends, management fees, premiums, etc.). Without derogating from the generality of the above, here are some examples:

Banking institutions

The total income of banking institutions from current activities will include, among others, the following income: interest income, commissions, income from investment in securities, dividends from investment in securities and subsidiaries.

Insurance companies

The total income of insurance companies from current activities will include, among other things, all income from insurance premiums (including income from the renewal of insurance policies).

Investment companies 

The total income of investment companies will include, among other things, the following income: income from management fees, dividends and other receipts from the invested assets.

18) Series of transactions that must be treated as one transaction

See topic 9 with respect to a series of transactions that might be treated as one transaction. In case a series of transactions is treated as one transaction, the merging parties' revenues will be calculated according to the general rules described in topic 16 and 17.

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control


20) Special industries, owners or types of transactions

There is no obligation to file a merger notification in the following situations:

  1. Merger transactions in which a person who lawfully holds more than half of each of the types of rights listed in topic 9, acquires an additional 25% in a manner that increases his holdings in any right to a rate exceeding 75%.
  2. Reorganization within a group of companies, i.e. transactions in which internal changes are made within a group of companies and the rights in the merging companies are held in full by the same party.
  3. Merger transactions in which the filling obligation is based only on the market share thresholds due to the seller's monopolistic status, when the seller will completely separate from the target following the merger, and when the target's activity sold is not the activity due to which the seller is a monopolist. 
  4. With regards to the food retail industry, a merger transaction with respect to which an approval under the Foods Sector Competition Promotion Law (the “Food Law”) is required.

In addition, a merger transaction in the food retail industry which does not require an approval under the Food Law, and which meets the following criteria, will also not require the submission of merger notifications, even if the market share filing threshold is met:

  1. In the framework of the transaction (i) the rights in a single supermarket store are being transferred; (ii) this is not the seller’s only store in the relevant geographic area (based on the ICA’s publication of geographic demand areas); and
  2. The turnover threshold is not met by the parties to the merger. 

21) Transactions involving only foreign businesses (foreign-to-foreign)

Merger control under the Competition Law does not apply to a merger in which at least one of the parties is a foreign company that does not have nexus to Israel. No nexus to Israel is established with respect to a company which meets all of the following conditions :

  1. It is not registered in Israel;
  2. It does not have a ‘merger affiliation’ with an Israeli company - meaning it does not hold more than a quarter of any of: the nominal value of the issued share capital; the voting power; the power to appoint more than a quarter of the directors; or participation in more than a quarter of the profits in an Israeli company; either directly or indirectly through negative control over an Israeli entity through, e.g., extensive veto rights. 
  3. It does not maintain a place of business in Israel and does not hold a significant influence over the conduct of a local representative (e.g., agent, distributor, representative, etc.).

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but the parties may apply for exemption from the notification requirement and a simplified procedure is in any case available if there is no overlap (also see topic 23 and 33).

23) Other exemptions from notification duty even if thresholds ARE met?

When the filling obligation is based solely on the market share threshold due to the fact one of the merging parties has a monopolistic market share (above 50%), but there are no horizontal, vertical or complementary aspects between the monopolistic activity of that party, and any of the activities of the other party to the merger, the ICA will be willing, upon a written request by the parties, to exempt them from filing merger notifications. Such exemption will be based on the representations of the parties concerning the merger and their lines of business, and will be granted only if the ICA is convinced that the information before it indicates that under the circumstances presented to it, there is no competitive link between the monopolistic activity and the other party's activity.

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

In some cases there may be difficulty in determining whether the thresholds are met (in particular difficulties in estimating the parties’ market shares may arise) and so the parties may file a notice of merger as a precautionary measure. In such a case, the ICA will request the parties to commit that they will abide by any decision made by the ICA, regardless of the fact the submission was made as a cautionary measure.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?


Referral to and from other authorities

26) Referral within the jurisdiction

There is no referral mechanism from other authorities under Israeli Competition Law. The ICA will only review mergers filed by the parties, based on the thresholds set by the Competition Law.

27) Referral from another jurisdiction

There is no referral mechanism from other jurisdictions under Israeli Competition Law.  The ICA will only review mergers filed by the parties, based on the thresholds set by the Competition Law.

28) Referral to another jurisdiction

There is no referral mechanism to another jurisdiction under Israeli Competition Law.

29) May the merging parties request or oppose a referral decision?


Filing requirements and fees

30) Stage of transaction when notification must be filed

There is no specific deadline for filing a merger notification, however a merger transaction may not be implemented before the merger has been approved by the ICA. Filing requires a binding agreement to be signed by the parties to the transaction, however the ICA may waive this requirement in exceptional circumstances.

The ICA may agree to handle a merger notification before a binding agreement has been concluded, where the parties can demonstrate that the main aspects of the transaction have already been agreed and it is highly likely that an agreement will be concluded, and in addition when there are specific considerations to review and approve the merger prior to signing, e.g. initial public offering (IPO), a public takeover bid etc.

31) Pre-notification consultations

Theoretically the ICA may engage in pre-notification consultations, based on the parties' request, if (1) there is an essential need to discuss the transaction prior to formal submission of merger notifications; (2) the legality of the transaction is questionable; (3) there is an economic issue of which the ICA has already developed its opinion; or (4) there is a question of interpretation which constitutes a precedent.  

As the formal review process only begins upon filing of merger notifications, the scope of review will generally be more limited compared with the formal process. For example, request for information from third parties will generally only be issued once the merger notification has been filed. 

In addition, there is no assurance that the final outcome of the formal review process will be the same as the guidance that the ICA can provide in a pre-notification consultation. 

Finally, the deadlines for merger review will only start to run from the formal submission of merger notifications.

For all these reasons, pre-notification consultations are not very common in Israel. 

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified, prior to their consummation. Merger notification shall be submitted by the purchasing party as well as the company whose securities are being acquired. 

In general, the ICA only reviews a merger after both parties to the merger submitted merger notifications. However, in the case of a takeover bid, the ICA may agree, on a case by case basis, to review the merger based on a merger notification submitted by the acquiring party only, in particular where the management of the target company opposes the takeover bid and delays the submission of merger notification. 

33) Forms available for completing a notification

The merger notification form is available in English here.

34) Languages that may be applied in notifications and communication

Hebrew and English. Note, however, that only a foreign company (not incorporated in Israel) is entitled to file a merger notification in English, subject to the provision of a Hebrew translation of the merger notification certified by a lawyer.  

35) Documents that must be supplied with notification

The following documents should always be supplied with a merger notification whether simplified or full:

  1. The merger agreement including all its appendices (the transaction documents).
  2. The audited financial statements of each of the parties to the merger for the last two fiscal years. Foreign entities may submit financial statements of the entity/ies through which it operates in Israel. If financial statements of the most recent fiscal year are not yet available, the ICA is willing to accept an auditor’s approval of the merging party’s revenues in Israel in that year. 
  3. A detailed chart describing the situation before and after the merger.
  4. Other documents relevant to considering the competitive effects of the merger. As this is an open requirement, in practice it has been interpreted as optional. However, it is quite customary to submit an accompanying cover letter describing the competitive effects of the merger and adding additional details regarding the transaction.
  5. If approval of a restrictive arrangement (not covered by the applicable block exemption) is requested in the context of the merger notification, documents that are relevant to considering the competitive effects of the restrictive arrangement must be supplied.

36) Filing fees

There are no filing fees for submitting merger notifications in Israel. 

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

Yes. The merging parties’ businesses must be run separately and independently until the merger has been approved. Moreover, the parties may not implement any part the transaction, or conduct any step towards its consummation (including payment of any part of the consideration, appoint officers, involve in or affect decision making of the acquired business, receive any benefits from the acquired entity etc.), prior to approval. 

However, normal preparatory steps which do not constitute a consummation of the transaction are not prohibited (see topic 39).

38) May the parties get permission to implement before approval?

There are no guidelines on the possibility of getting permission to implement before approval and in general, such approval will not be granted.

Notwithstanding the above, in exceptional circumstances, the ICA may be open to approve a partial implementation that would otherwise be prohibited, e.g., payment of outstanding debts of a target company by the acquiring party, but provided that the action is reversible, no special rights in the business are granted to the acquiring party and that there is a necessity to implement prior to approval (e.g., a target company that would otherwise become insolvent). 

39) Due diligence and other preparatory steps

There are specific guidelines published by the ICA covering information exchange between competitors (actual or potential) in the course of a due diligence process prior to a merger transaction. Exchange of sensitive information from a competitive point of view, between competitors, may constitute a restrictive arrangement, and must therefore be conducted strictly pursuant to these guidelines, in a way that prevents competitive sensitive information from being used for purposes other than assessing the viability of the merger.

Due diligence between companies that are not competitors is not subject to any specific rules or guidance. 

There are no guidelines on what may be considered acceptable preparatory steps. Preparation of integration between the companies, e.g., integration of internal, non-commercial, functions such as IT and HR is generally acceptable. However, one should carefully consider whether the preparatory steps are necessary and do not in effect transfer operational control of the company to the buyer.

40) Veto rights before closing and "Ordinary course of business" clauses

It is quite acceptable for merger agreements to include a clause that limits the target company from taking decisions outside the course of its ordinary business until the closing date. However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning – any decisions in their respective businesses. If any, veto rights should be limited in scope. 

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Israeli part of a transaction to avoid delaying implementation in the rest of the world pending approval in Israel.

42) Consequences of implementing without approval/permission

Implementing a merger prior to obtaining an approval from the ICA is a criminal offence according to the Competition Law, and in addition may expose the parties to administrative fines. 

The amount of the administrative fines will be determined based on the guidelines of the ICA for setting administrative fines and taking into account the nature, gravity and duration of the infringement, as well as the competitive effect of the merger on competition (e.g., whether the merger raises any competitive concerns, or alternatively would have been easily approved if filed properly). The maximum fine for companies per infringement is 100 million NIS or 8% of the local turnover of the company in the relevant business in which the infringement occurred, including in any adjacent business activity of the company. Individual managers and controlling shareholders of the company, who had been involved in the infringement, or were in charge of the field in which the infringement occurred, can also be fined up to a maximum fine of 1 million NIS per infringement. 

According to the ICA's guidelines, horizontal mergers implemented without obtaining prior approval will be subject to criminal prosecution.

In addition to the criminal and administrative exposure, the ICA is also entitled to file with the Tribunal a request to grant an order to split up the merged entity or transfer the acquired shares or assets of the acquired company, or any part of them, to a third party unrelated to the acquirer, or take any other measures necessary to restore efficient competition, in case it was proved that the competition or the public would be significantly harmed as a result of the merger.

The process – phases and deadlines

43) Phases and deadlines



Pre-notification phase:

There is no formal pre-notification phase under Israeli Competition Law. There have been a few, very rare, occasions where parties to contemplated competitively complex transactions approached the ICA beforehand to get an initial sense as to whether the ICA would even be willing to consider such a transaction. For further elaboration, please see topic 31. 


Phase I:

The merger is either approved, approved with remedies, if relevant, or it is decided to initiate a phase II investigation of the merger. 

The Phase I analysis will most likely begin with a request by the ICA for an initial call with each of the parties and will approach third parties, such as customers, suppliers and sometimes competitors, to understand the market and the effect of the merger on that market. 

The ICA is required to consult with the Exemptions and Mergers Committee before handing down its decision.

30 calendar days. 

"Phase II":

The merger is either approved, approved with remedies or prohibited.

Phase II includes a detailed economic analysis, in depth discussions with the parties to the merger and third party, as well as with relevant sector specific regulators. 

The ICA will most likely send out requests for information for the merging parties as well as relevant third parties. 

The ICA will notify parties beforehand if it intends to object to a merger or condition it with remedies, to allow for discussions on remedies, a hearing and withdrawal of merger notifications, if the parties decide that an objection to the merger is not desired. 

The ICA is required to consult with the Exemptions and Mergers Committee before handing its decision.

The General Director of the ICA may extend the initial 30 days review period by two additional 30 days periods. After the additional 60 days, the General Director may further extend the review period by an additional 60 days after consultation with the Exemptions and Mergers Committee and shall inform the parties of such extension by reasoned notice. Therefore, total review period Phase I+II, up to 150 days). 

It should be noted, that in practice, in very complex cases the ICA will request the parties’ consent to extend the review period without having to provide a reasoned decision, which may go beyond the 150 days prescribed by the Competition Law. 

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

The General Director of the ICA will object to a merger, if the ICA has a reasonable concern that as a result of the merger, competition in the relevant market/s will be significantly harmed or the public will be harmed in terms of: (1) the price of product or service; (2) the quality of a product or service; or (3) the quantity of the product or the scope of the service provided, or regularity or terms of supply. This unless such reasonable risk to competition may be resolved through the imposition of appropriate remedies. 

During the review of a merger the ICA may issue a Request for Information to the parties to the merger or to any third party which may provide relevant information. The ICA has extensive powers to ask any individual or company to provide any data and documents required for the performance of its duty under the Competition Law. Any person or company which receives such request for information is under a legal obligation to respond. 

The economic analysis entails an evaluation of the structure of the relevant market and the competition from two aspects: static and dynamic. Significant harm to competition occurs when the probable outcome of the merger is the creation, enhancement, maintenance or ease of market power, taking into consideration the relevant competitive conditions currently available in the market, as well as predicted conditions. The static aspect of the merger analysis looks at identifying competitors, their market shares and the level of concentration in the relevant market. The dynamic aspect of the analysis looks at the potential for changes in the market, including, inter alia, changes in the competitive capability of current competitors including their ability to expand, entry of new competitors and expected technological changes.  Lastly, the ICA will consider any claims for efficiencies stemming from the merger and the failing firm doctrine. However, it should be noted that these claims will rarely be accepted by the ICA. 

45) May any non-competition issues be considered?

No, the ICA’s mandate is to consider only competition issues. However, if an appeal regarding a decision to object to a merger is submitted to the Tribunal, it may consider other issues, namely public interest. 

46) Special tests or criteria applicable for joint ventures

The competitive assessment of joint ventures is similar to that of mergers. However, it should be noted that in certain circumstances, the classification of a joint venture as a merger or alternatively, as a restrictive arrangement, is not clear cut. Please see topic 13. 

47) Decisions and remedies/commitments available

A merger may be approved, approved with remedies or prohibited. A merger approval is technical in its form and only includes the names of the parties and the fact that the merger was approved. An objection to a merger will include a detailed description of the economic analysis performed, including reference to the relevant market/s, the competitive conditions and the competitive concerns whereby the ICA has decided to object to the merger. 

If the ICA finds there is a reasonable risk for competitive harm, it is required to try to consider remedies, which will offset the competitive harm created by the merger. The purpose of the remedies is not to enhance competition in the market/s or promote competition in market/s unrelated to the merger, rather to restore the competitive reality in the market before the merger or that would have been if it was not for the merger. 

Generally speaking the ICA will prefer structural remedies to behavioral remedies. Structural remedies are divestiture, i.e., selling off part of the business in one of the parties’ possession, the continued holding of which, post-merger, will presumably harm competition. Divestiture will likely be required as a “fix-it-first” condition; that is the parties will be required to divest the relevant asset prior to consummation of the merger. 

Publicity and access to the file

48) How and when will details about the merger be published?

Officially, the ICA publishes information regarding the merger only upon reaching a decision as regards the merger. However, during the economic analysis of the merger, the ICA is likely to approach third parties to receive information about the market. Therefore, the merger will not remain a confidential issue during the review process. It should be noted, that the ICA does not coordinate public communications with the parties to the merger. Once the ICA has made a final decision regarding the merger, it will publish the decision and certain information provided by the parties (non-confidential parts of the merger notifications submitted by the parties), in the Official Registry, managed by the ICA. 

49) Access to the file for the merging parties and third parties

The merging parties:

In case the ICA objects to a merger, the merging parties, who have a right to appeal such decision, have a right to access the ICA records, which include documentation of correspondence with the merging parties, information provided by third parties, including documentation of discussions with third parties, any information provided in response to Requests For Information sent by the ICA to third parties, as well as an overview of all documents/correspondence in the ICA’s record. 

However, such right is subject to a few exception. In this regard, the ICA will allow third parties who provided information a chance to request that confidential commercial information be redacted before it is provided to the merging parties. In addition, there is no right of access to the ICA’s internal documents, specifically the ICA’s internal economic opinion which is used to present the merger to the Exemptions and Mergers Committee. There are also certain other restrictions relating to the right of access to the records, e.g., national security concerns, foreign relations, etc. Merging parties may reach an understanding with the ICA, supported in the past by the Tribunal, to allow access only to legal and economic advisors to commercial and/or competitive confidential information, following their signature on commitments for confidentiality.

Third parties:

As stated in topic 48, the ICA has a public registry in which certain information regarding any merger is published. In addition, a third party who claims he may suffer an antitrust injury from the merger, and would like to file an appeal as regards the ICA’s decision, may request to review additional information from the ICA’s records. The ICA will ask the providers of the relevant information for their approval to grant access to the file. In case of commercially sensitive or competitive sensitive information, the ICA may either redact the information or reach a similar understanding with regards to access to confidential information only to legal and economic advisors, following their signature on commitments for confidentiality. 

Judicial review

50) Who can appeal and what may be appealed?

A decision by the ICA to approve a merger or approve it under conditions can be appealed to the Tribunal by injured third parties, business unions or consumer organizations. 

A decision to approve under conditions or object can be appealed to the Tribunal by the merging parties. 

The Tribunal is entitled under law to approve the ICA’s decision, revoke or amend it. Based on court rulings, the Tribunal has wide discretion to evaluate the ICA’s decision de novo, given a starting point granting significant weight both on the theoretical and practical level to the professional position of the General Director of the ICA. A third party wishing to appeal the ICA’s decision must show that it specifically will suffer an antitrust injury as a result of the merger, meaning an injury in those interests that the Competition Law was designed to protect. 

A decision by the Tribunal may be appealed to the Israeli Supreme Court. Generally speaking, the Supreme Court will not review and deliberate factual elements, rather will discuss judicial issues arising from the Tribunal’s decision. 

modify selections