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Process and timing
Is the notification process voluntary or mandatory?
The notification process is mandatory and no voluntary merger notification mechanism is in place.
However, this may change if the Israeli Antitrust Authority (IAA) 2015 reform passes.
Under the proposed reform, the substantive test will apply to all mergers that raise reasonable competitive concerns, including those that fall below the statutory filing thresholds. Mergers that fall below the thresholds will be subject to a self–assessment in order to determine whether to submit a voluntary notification. However, if the IAA decides to examine the notification, it will be subject to the mandatory notification process. The objective of the reform is, on the one hand, to ensure that mergers which raise competitive concerns are subject to merger control and, on the other hand, to create certainty in the market applying the voluntary notification process.
What timing requirements apply when filing a notification?
The Restrictive Trade Practices Law applies a pre-merger notification regime.
There is no deadline within which notification must be filed; however, the transaction cannot be closed until the IAA's approval has been received.
What form should the notification take? What content is required?
A substantial amount of information is required to prepare a filing. In most cases, where counsel work diligently with client personnel, it takes around one week to compile the information required for short form filing and 15 days to compile the information required for a long form, depending on the merger classification (ie, horizontal, vertical or conglomeratic).
The information required essentially comprises factual data with respect to the relevant market(s) and lists of competitors, customers and suppliers for each relevant product or market.
Parties can provide the IAA with a short notification form if the following conditions are met:
- The combined shares in the product market of the merging companies, including any shares held by an individual with a personal connection, do not exceed 30%;
- No merging company, including any related person, is a monopoly in a product market related in any way to the market that is subject to the merger transaction; and
- No merging company, including any related person, is a party to an arrangement with a third party that competes in the product market that is the subject of the merger transaction.
Is there a pre-notification process before formal notification, and if so, what does this involve?
The IAA will usually agree to receive a filing notification only after a binding agreement is established between the parties.
However, in rare circumstances the IAA will agree to receive a filing before a binding transaction occurs, on the grounds that the transaction will likely be signed within a few days and there are good reasons for such a request.
Can a merger be implemented before clearance is obtained?
No, it is unlawful to complete the transaction before receiving the IAA's approval. The parties must submit notification and wait to receive approval before implementing the merger.
Guidance from authorities
What guidance is available from the authorities?
The IAA has published guidelines and general directors’ opinions regarding merger control, addressing issues including:
- the procedure for reporting and evaluating mergers pursuant to the Restrictive Trade Practices Law;
- remedies for mergers that raise reasonable competitive concerns; and
- competitive analysis of horizontal mergers.
The IAA also issues annual reports indicating recent trends and practices in Israel’s merger control regime.
What fees are payable to the authority for filing a notification?
There are no filing fees for merger notifications. However, pursuant to Section 20 of the Restrictive Trade Practices Law, the minister of finance may determine filing fees.
Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?
The general director maintains a register of company mergers which is open to public scrutiny at the IAA's offices and on its website.
The register contains the merger notices of both the parties, excluding confidential chapters – as defined by the parties – and the notices' exhibits.
In addition, the IAA will contact marketplace participants, including competitors, suppliers and customers, to seek their views in respect of proposed transactions.
Are there any penalties for failing to notify a merger?
Failure to notify a merger or closing a transaction before receiving the IAA's approval are criminal offences punishable by a three to five-year imprisonment (although in practice most cases end with plea bargains) or a maximum fine of NIS2 million (approximately $560,000). Alternatively, such offences may be subject to considerable administrative fines.
Failure to notify a merger or closing a transaction before receiving the IAA's approval also constitute civil torts.
The Israeli Competition Tribunal may issue a disbandment order (ie, sequestration of the merged company) for an unauthorised, completed merger that has breached the provisions of the law.
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