Notification and clearance timetable

Filing formalities

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

The Competition Law does not determine any deadline for filing pre-merger notification forms. Yet, a merger that requires the approval of the Director General must not be implemented by any means - including, for example, by closing the transaction, by transferring assets or shares (even to a trustee on behalf of the purchaser), by actually managing the merged company, and the like - before it is cleared by the Director General. As with many other violations of the Competition Law, failure to notify a notifiable merger is a criminal offence (in practice, criminal charges have only rarely been brought in such cases). The sanctions that apply in cases of unlawful mergers, including for not filing a pre-merger notification form, are described in question 12.

Which parties are responsible for filing and are filing fees required?

Each party to a merger is required to file its own pre-merger notification form. Currently, no filing fees are required for the submission of pre-merger notification forms.

As of April 2017, parties to a merger must carry out submission of merger notification form via electronic means (ie, by email). Physical submission of the merger notification form will be possible only when there is a sufficient reason preventing the parties from submitting the forms digitally.

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

The Director General must render a decision within 30 days of the submission of the complete pre-merger notification forms by all parties to the transaction. If no decision is made within this period, the merger is deemed to be cleared.

According to the 2019 amendment of the Law, the Competition Tribunal is no longer the recipient of requests for the extension of a merger notification review, and that authority now vests with the Director General. As an outcome, the 30-day period may be extended either with the consent of the parties, or by the ICA’s Director General. A merger that must be notified under the Competition Law must not be implemented prior to its clearance.

Pre-clearance closing

What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?

The implementation of a notifiable merger prior to its clearance or without an approval is a criminal offence. The sanctions determined in the Competition Law were modified in the 2019 amendment of the Law, which annulled the classification of aggravating circumstances, but raised the penalty for being a party to restrictive arrangement to a maximum of five years’ imprisonment, classifying the offense as a crime. In addition, fines may be imposed, up to about 2.2 million shekels for an individual, plus 14,000 shekels for each day the offence persists. In the case of a corporation, the fine or the additional fine, as applicable, will be doubled. Moreover, the Competition Law includes a strict liability offence for managers, under which any person serving in a corporation at the same time that an antitrust offence is being committed, in the role of an active director, a partner (other than a limited partner) or a senior administrative employee with responsibilities in the relevant field, has a criminal liability for the offence, unless it can be shown that the offence was committed without the manager’s knowledge and that this manager took all reasonable measures to ensure compliance with the Competition Law.

Alternatively, the Director General may issue an administrative declaration, stating that a merger has been executed unlawfully, thereby exposing the merging parties to civil lawsuits, as such declaration constitutes prima facie evidence in any judicial proceedings.

Furthermore, the Competition Tribunal may order the separation of an entity merged in violation of the Competition Law on the application of the Director General and upon showing a reasonable likelihood of significant harm to competition or injury to the public in respect of the product’s price, quality, quantity, or regularity or terms of supply.

In practice, the director general has taken action against allegedly unlawful mergers in only a few cases, two of which resulted in criminal sanctions. The Competition Tribunal has considered only two cases in Israel brought by the Director General to separate an allegedly illegally merged entity: one in 2007 - Prinir (Hadas 1987) Ltd and Milos (1989) Ltd and the other in 2003 - Baron-Fishman Communication Ltd and Yedioth Achronot Ltd.

Additionally, the Competition Law enables the Director General and parties to an unlawful merger to agree in the framework of a consent decree, inter alia, on an amount of money to be paid to the State Treasury in lieu of criminal procedures or an administrative declaration. The consent decree may include a provision, according to which the parties do not admit responsibility (ie, that a merger has been unlawfully executed). Over the past year, the Competition Tribunal approved two consent decrees. The first involved two construction companies: El Har Ltd and Taan Ltd. The companies made a transfer of shares according to a share purchase agreement, prior to the submission of pre-merger notification forms. The companies agreed to pay an amount of 250,000 shekels, and the director general undertook not to take additional enforcement measures in the matter. The second consent decree involved a share purchase agreement between Tal Hel Yasca Ltd and Fresh and Smooth Part 2 Ltd. Prior to the submission of pre-merger notification forms by either of the parties, the companies informed the director general that Tal Hel had transferred a sum of 5 million shekels to the acquired company, to enable its continued operation in light of its financial problems. According to the Director General, the provision of finance was part of the merger transaction, and therefore constitutes an implementation of the transaction before approval. The parties agreed to pay the State Treasury sums of 170,000 and 40,000 shekels, pursuant to an agreement that they will not admit to a violation of the provisions of the law and the Director General undertakes not to take additional enforcement measures against them in this matter.

The Director General can impose monetary sanctions in lieu of criminal indictment, inter alia, in case of an unlawful merger. In this respect, the ICA’s guidelines on the enforcement procedures for the use of financial sanctions state that financial sanctions will be imposed mostly in the case of non-horizontal mergers (this does not, however, negate the possibility that in the appropriate circumstances the ICA would choose other administrative enforcement tools over criminal ones, in respect of horizontal mergers). The monetary sanction under the new amendment is up to 1 million shekels for a person that, inter alia, executed an unlawful merger. Regarding corporations, the 2019 amendment of the Law raised the amount of monetary sanctions to up to 100 million shekels, but not more than 8 per cent of the annual revenues for a corporation whose revenues in the preceding financial year exceeded 10 million shekels.

In October 2016, the Competition Authority published guidelines regarding the considerations of the Director General in determining the amount of financial sanctions. According to the said guideline, the amount of the sanction will be determined according to the following four stages:

  • determination of the maximum amount of the sanction;
  • determination of the severity of the violation based on the circumstances of the case (with an emphasis on the degree of damage that the breach may cause to competition or the public);
  • examination of the violator’s part in the violation, the extent of the violating party’s influence on the performance of the violation and the actions taken by the violating party to stop or prevent the recurrence of the violation; and
  • evaluation of external circumstances of the violation, such as the existence or absence of previous violations.

Between 2018 and mid-2019, the ICA objected to four merger notifications and approved with conditions three others. The ICA’s research and analysis of the market for purchasing digital and physical commercial ‘areas’ of advertisement led to objection to a merger between two out of the five leading competitors. The ICA based its decision on the possible aggregate market power that the merger might create. The Director General expressed her concern that the merger might eventually lead to a decrease in the TV channels’ advertisement income and, consequently, of their investment in creating original valuable content.

In its opposition to a merger between two medium-sized banks, the ICA’s analysis revealed that the domestic banking sector is characterised by significant entry barriers that led to the absence of a new bank in Israel for decades. Consequently, this raised the ICA’s concern that the merger would pave the way for the existing banks’ ability to reach a balanced equilibrium and, eventually, increase banking prices. The examination took into consideration the regulator’s efforts to ease customers’ mobility between banks.

In another merger between banks (the Discount banking group and Dexia-Israel), the ICA’s analysis found that the merging banks compete on providing credit facilities to municipalities and regional authorities. The merger was approved, conditioned on divestiture of some of the credit activities of the merging entities.

Another objection was raised by the Director General in the Israeli airliners sector, to a merger between Sun-Dor International Airlines and Israir Aviation. In this case, EL AL, Israel’s largest airline, sought to merge its wholly owned subsidiary Sun-Dor with Israir. Israir, one of EL AL’s only Israeli competitors, has a significant share in the domestic air market, and in recent years also recorded an increase in its international operations. Following the ICA’s analysis, the Director General decided to oppose the merger for two main reasons. First, the merger will prevent EL AL from potentially competing on the routes to the southern city of Eilat, and thus strengthen the existing duopoly of Arkia and Israir in these routes. Second, EL AL’s absolute and exclusive dominance in the provision of security services outside Israel, to all Israeli airlines flying abroad, raised concerns about EL AL’s ability to refuse to provide the security services to it competitors, in order to push them out of some international lines.

In another case, the Director General approved an amendment to the conditions set on the already approved merger from 2002 between various telecommunications cable companies operating in Israel. The amendment resulted in a decision not to remove or reduce the prohibition on the merged company to participate in the market of sports channels and local original content production, distribution and ownership holdings. The decision was led by the concern that, if removed, the merged company will be able to ‘push’ competitors out of the multi-channel market, raise barriers to their entry and expansion, as well as diluting the variety of content and opinions because of the possible suppression of independent channel producers.

In the case of a merger between Reshet Media, one of Israel’s leading media entities, and Channel 10 that was under financial duress, the Director General decided to approve the merger but to conditioned it by the sale of Reshet’s holdings in its news company. The approval was based on the ‘failing firm’ doctrine weighing the potential competitive harm against the effect of the collapse and removal of a major TV channel from the market.

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

In general, if a foreign-to-foreign merger constitutes a merger according to the criteria of the Israeli Competition Law (as detailed in question 7) all the sanctions (as mentioned in question 12) are applicable. Nevertheless, we are unaware of any case in which the Director General has sanctioned a foreign entity for unlawfully implementing a merger.

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

There is no provision in the Competition Law enabling the closing of a transaction before it has been cleared; neither are there any official guidelines allowing that.

However, the Director General may agree with the parties to a foreign-to-foreign merger to refrain from taking action against the merger, under conditions ensuring that local competition will not be harmed during the period in which the ICA is reviewing the merger. A local ‘hold-separate’ arrangement may be such a solution.

Public takeovers

Are there any special merger control rules applicable to public takeover bids?

No special substantive test applies to public takeover bids.

Regarding the filing requirements of pre-merger notification forms, in the case of a purchase offer on the stock exchange, the ICA is willing to start reviewing a merger on the basis of the purchaser’s notification. The ICA’s position is that the time set by the Competition Law for reaching a decision does not start to run until the definitive signed agreement is filed and pre-merger notification forms are filed by all parties concerned.


What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?

In 2004 the ICA introduced new regulations, which presented two new pre-merger notification forms; one is fairly detailed (the ‘long form’) and the other is an abbreviated form.

The long form expands significantly upon the information submitted to the ICA at the initial notification of the transaction. Such information would be:

  • a description of the transaction;
  • a description of the parties’ business activities, including lists of their horizontal and vertical activities;
  • with regard to each relevant market to the merger:
    • sales volumes;
    • market shares;
    • lists of customers, suppliers and competitors; and
    • a description of the types of customers of each party;
  • an estimation of competitors’ market shares;
  • a description of the barriers to entry and to expansion; and
  • a list of the agreements that each party has with its competitors in each relevant market.

The parties are also required to apply for an exemption for any ancillary restraint to the merger, which is not exempted under the block exemption for ancillary restraints. In addition, each party is required to mention whether it has been a party to another merger in the past three years.

Each party has to enclose with its pre-merger notification form the following documents:

  • the merger agreement and its appendices;
  • audited financial statements for the last two fiscal years (a foreign company may attach audited financial statements of entities through which it operates in Israel instead of filing its financial statements);
  • prospectuses filed during the last five fiscal years; and
  • other documents relevant to considering the competitive effects of the merger.

A party that has submitted another pre-merger notification form during the past year may submit a pre-merger notification that makes reference to the prior pre-merger notification form.

The general requirement is that the long form must be submitted. However, if all the following terms are met, the parties may file the abbreviated forms:

  • the combined market share of the merging parties (including related entities) in the product market that is the subject of the merger transaction does not exceed 30 per cent;
  • none of the merging entities, including related entities, is a monopoly (ie, market share in Israel does not exceed 50 per cent) in a market that is tangential to the market that is the subject of the merger; and
  • none of the merging companies, including related entities, is a party to an arrangement with a third party that competes with it in the market for a product that is the subject of the merger.

The information required under the abbreviated form is much more limited and quite basic. It includes basic details on the submitting party, definition of the relevant market, the parties’ estimated market shares in the relevant market and in horizontal or vertical corresponding fields, and lists of suppliers and customers.

If the abbreviated forms are filed, the ICA may require the parties, within 15 days, to submit the long form, in any one of the following cases: the terms for filing the abbreviated forms were not met, or if there is substantial doubt as to the accuracy of the information provided in the abbreviated form; the market definitions of the parties were not correct; or the combined market share of the parties in a market that is not the subject of the merger exceeds 30 per cent and the merger may raise a reasonable likelihood of material injury to competition.

As of January 2013, pre-merger notification forms may be submitted online.

The possible sanctions for supplying wrong or missing information are as follows:

  • First and foremost, a pre-merger notification form that does not meet the requirements set forth above, does not constitute a ‘merger notice’. Therefore, only upon submission of full notification forms by the merging companies, the time-limit for the Director General’s decision, as specified in question 11 above, will commence.
  • Section 239 of the Penal Law prescribes a maximum penalty of three years imprisonment for providing a false statement. In addition, providing false or misleading information can lead to charges with attempted fraud, under section 415 of the Penal Law. In this case, the perpetrator is also subject to up to three years’ imprisonment, or five when committed in aggravated circumstances.
Investigation phases and timetable

What are the typical steps and different phases of the investigation?

The Competition Law does not divide the examination of mergers into different stages.

The process of a merger review is in general as herein described. Once pre-merger notification forms are submitted, the merger would be classified into one of the following three tracks: green, yellow and red - each one represents the likelihood that the merger might harm competition (the last category is assumed to substantially harm competition). Such classification is not required under the Competition Law; it is not official and has no legal consequences, but was adopted by the ICA to make the review process more efficient and to shorten the period for decision-making.

If additional information is required by the ICA’s professional staff (mainly by the department of economics, but also by the legal department), the ICA may require the parties to the merger or any third party (such as competitors, customers and suppliers of the parties to the merger), to provide it with the necessary information (regarding the authorisation to do so - see question 29). In addition, the Competition Law instructs the ICA to notify any merger to the relevant governmental agency, and the latter is invited to submit its opinion regarding the merger to the ICA.

The Director General may not clear a merger unless he or she has consulted with the Exemptions and Mergers Advisory Committee. In practice, the Director General consults with the Committee even in cases in which he or she tends to block a merger.

What is the statutory timetable for clearance? Can it be speeded up?

The Competition Law sets a review period of 30 days, during which the Director General is required to render a decision. According to the new amendment to the Law, this period can be extended by the ICA’s Director General (expropriating the Tribunal’s authority) or with the consent of the merging parties. If no decision is made within the prescribed period, the merger is deemed compatible with the Competition Law.

There is no provision in the Competition Law that compels the Director General to clear mergers within a shorter period. In practice, the majority of mergers are cleared within 30 days or fewer, especially those mergers that do not seem to raise any competitive concerns (green mergers). The average review period of merger applications in 2018 was 22.5 days. Furthermore, in special cases in which a particularly quick decision is necessary, such as the case of a collapsing company, the ICA would cooperate with the parties and make efforts to speed up the review process.

In May 2016, the ICA announced that it is initiating a fast track for the approval of mergers, designed to reduce excess regulation, and focus the ICA’s resources on reviewing those cases that raise significant concern of harm to competition. Under the new procedure, mergers that clearly do not present a threat to competition will be directed to a fast-track approval (ultra-green merger). In such cases, the decision regarding the merger will be made within a period of time ‘significantly shorter than 30 days’. However, the ICA did not commit to a specific timetable. Under the fast track, the parties are required to file a long pre-merger notification. In November 2016, the ICA published a report of its accumulated experience in applying this new procedure. According to the ICA, during the trial period that lasted three months, 20 mergers were handled in accordance with this procedure. The average review of these mergers was less than five days from the date of submission, a period significantly shorter than the average time frame for dealing with mergers that are not treated under the fast-track procedure. Furthermore, in February 2017, the ICA announced an amendment to the said procedure, according to which mergers that contain a request for a specific exemption to a restrictive arrangement will not be dealt with under the fast track, but will rather be examined in the regular merger review track.