Sources inform ''Globes'' that Antitrust Authority director general Dror Strum is expected to approve the merger of Clal Industries and Investments Ltd. (TASE:CII) subsidiary Kitan Textile Industries Ltd. and Offis Textile Ltd. (TASE:OFIS), controlled by Fishman Holdings.
“Globes” reported yesterday that Kitan and Offis Textile were negotiating a merger through a share-swap. The merger is intended to cut operating costs, mainly by consolidating Offis Textile’s factory in Azor with Kitan’s factory in Dimona. The merger is also intended to consolidate marketing channels and strengthen the companies’ exports, in the face of competition with cheap textile exports by China, which are flooding the European and US markets.
Strum will not approve the merger because of the condition of Israel’s textile industry, but because of intense competition, caused by opening the market to imports. Tefron Ltd. (NYSE: TFR) recently fired 300 employees, and Delta Galil Industries Ltd. (Nasdaq: DELT; TASE:DELT) 500. The present 8-12% levies on Chinese textile imports are ineffective in preventing imports; they only make them a little more expensive.
Consequently, there appears to be no obstacle to the proposed merger.
Eliezer Fishman is the controlling shareholder in “Globes”.
Published by Globes [online], Israel business news - www.globes.co.il - on August 16, 2005