Reuters logo
Israel's Mizrahi-Tefahot agrees to buy Union Bank for $400 million
November 28, 2017 / 8:30 AM / 14 days ago

Israel's Mizrahi-Tefahot agrees to buy Union Bank for $400 million

JERUSALEM (Reuters) - Mizrahi-Tefahot Bank (MZTF.TA), Israel’s third-largest lender, said on Tuesday it agreed to buy smaller rival Union Bank of Israel (UNON.TA) in an all-share deal that will help it to compete better with the country’s top two lenders.

Union, the country’s sixth-largest bank, has a market value of 1.4 billion shekels ($400 million).

Union shares rose 4.6 percent in early deals in Tel Aviv, while Mizrahi-Tehafot’s stock was up 1.2 percent.

Under the share swap, Mizrahi-Tefahot will buy the 75 percent held by Union’s controlling shareholders including Yeshayahu Landau and Shlomo Eliyahu Holdings. It will seek to buy the remaining 25 percent through an offer to the public.

The agreement is subject to regulatory approval as well as reaching a deal with Union employees on an efficiency plan.

Mizrahi Chairman Moshe Vidman and CEO Eldad Fresher said this would be one of the most significant transactions in the Israeli banking sector in years.

“It will significantly improve Mizrahi-Tefahot’s ability to compete with the large banks,” they told a meeting of the board, according to a statement from the bank.

Israel’s banking system is dominated by Hapoalim (POLI.TA) and Leumi (LUMI.TA), which together hold a market share of around 60 percent. The Bank of Israel has for years pushed for a third large bank to compete.

Mizrahi-Tefahot, Israel’s biggest mortgage lender with a market value of 14.4 billion shekels, said in July it was in talks to buy Union.

($1 = 3.5001 shekels)

Reporting by Steven Scheer, editing by Louise Heavens

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below