Photo: W.carter / Wikimedia Commons, CC BY-SA 4.0
The Competition Authority is weighing whether to condition approval of Shapir’s control of the Ashdod oil refinery on the group’s selling off additional business activities, Israeli financial outlets reported Sunday, after the concentration committee reconvened last week to re-examine its July recommendation against the deal.
The committee’s negative recommendation, delivered in July by a two-to-one vote, still stands, and no new binding condition has been set. But the renewed discussion, requested by the Energy Ministry, has opened a possible path in which Shapir could win a control permit for the Ashdod refinery, if it agrees to shed more of its holdings.
A refinery without an owner
The Energy Ministry pushed for the review out of concern that the refinery, which produces about 40 percent of the fuels and cooking gas consumed in Israel, cannot be left without a controlling owner with the financial strength to fund its development. The ministry’s director general, Yossi Dayan, argued that without a controlling shareholder or strategic investor, the refinery could struggle to finance long-term decisions, particularly as refining operations in Haifa Bay wind down and Ashdod’s importance grows.
Shapir, controlled by the Shapira family, currently holds about 10 percent of the Ashdod refinery with an option to raise its stake to roughly 65 percent, subject to regulatory approvals. Opposing the move is Zohar Levy’s Summit, which became the company’s largest shareholder in September after raising its stake to about 17 percent. Summit argues the refinery can be advanced by several significant shareholders without a single control core, and says it is prepared to support further capital investment if needed.
One obstacle cleared, a bigger one open
Less than three weeks ago, Shapir signed an agreement to sell its natural gas distribution businesses to the Allied group for NIS 230 million, a step meant to remove a separate regulatory barrier under the Natural Gas Sector Law. That sale has not yet closed, and regulators now appear to view it as insufficient on its own to resolve the broader concentration concern.
The July decision was not driven by Shapir’s share of the refining market itself but by the group’s overall weight in the economy. Shapir is one of Israel’s largest infrastructure groups, active in toll roads, light rail, quarries, raw materials, desalination plants and major government projects, and committee members worried that adding the refinery would deepen the state’s dependence on a single group.
The committee has now appointed a professional team, with representatives of the Energy Ministry, the Finance Ministry and the National Economic Council, to examine whether transferring control to Shapir would benefit fuel and refined-product consumers. Its conclusions will go back to the concentration committee, which will decide whether to change its recommendation. The final word rests with the authorized government bodies, and the decision may slip to the next government.
JBizNews Desk | Jerusalem
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