Supreme Court delays Dor Alon-Sonol merger

Judge Edna Arbel: Carrying out the merger will create a situation that will be very hard to undo.

Supreme Court Judge Edna Arbel today ruled that the merger between Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) and Sonol Israel Ltd. would be frozen until the Court hears an appeal filed by Antitrust Authority director general Ronit Kan. Judge Arbel accepted Kan’s request to delay the merger until the appeal is heard. Dor Alon president David Weissman and Shraga Biran control the company.

In September 2005, Dor Alon and Sonol filed a request to merge with the Antitrust Authority. Under the deal, Dor Alon is scheduled to buy Sonol from Granite Hacarmel Investments Ltd. (TASE: GRNT), controlled by the Borovich family, for $155 million. In November 2005, former Antitrust Authority director general Dror Strum announced his opposition to the merger, and the companies appealed to the Restrictive Trade Practices Tribunal. After reviewing the terms of the deal, the Tribunal approved it under certain conditions.

Arbel reviewed the parties’ positions, and noted the importance of the fact that the Restrictive Trade Practices Tribunal did not reject the arguments of the Antitrust Authority concerning reasonable concern about material damage to competition. Arbel largely agreed with the Antitrust Authority’s economic analysis.

Arbel said she was persuaded that a Dor Alon-Sonol merger was liable to create a situation that, even if it was not fully irreversible, would be very hard to undo. This would largely negate the results of the Antitrust Authority’s appeal, in the event that it wins.

Arbel ordered that no activities derived from the Dor Alon-Sonol merger should be carried out until the hearing on the appeal.

Published by Globes [online], Israel business news - www.globes.co.il - on April 27, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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