Strum okays Supersol-Clubmarket deal
Antitrust Commissioner Dror Strum yesterday approved the sale of Clubmarket - currently under court protection from its creditors - to Supersol.
Antitrust Commissioner Dror Strum yesterday approved the sale of Clubmarket - currently under court protection from its creditors - to Supersol, with certain provisos that were reached in an accord with the purchasers. The Commission's mergers committee also gave its approval.
Clubmarket, the third largest supermarket chain in the country, was put up for sale after running up debts of NIS 1.3 billion. The highest bid - NIS 825.5 million - came from Supersol, the largest chain in the country, hence the need for Strum's approval. Supersol is part of Nochi Dankner's IDB group..
The major proviso was that Supersol sell 15 Clubmarket branches where they are the direct and only competitor to a Supersol store. These include the Clubmarket stores in Beit She'an, Hakrayot, Kiryat Shmona, Hatzor Haglilit, Haifa's Neveh She'anan neighborhood and Kiryat Tivon.
Under the terms of agreement that were reached between Strum and Supersol representatives in talks late Monday night, in the interim period before the 15 branches are sold, Supersol will have to set the prices at those Clubmarket stores at the lowest tariff structure operating at the Supersol discount chain that operates a store in the area. For example: If a Clubmarket store is to be sold, and in the meantime there is a Supersol Deal discount store in the vicinity, prices at that Clubmarket store must be in line with the lowest prices charged by a Supersol Deal outlet anywhere in the country, even if the local store is selling at higher prices.
It was also agreed that Supersol cannot sell loss leaders - very popular or basic products known to draw customers sold at below-cost prices - at branches near smaller private competitors, in a clear declaration that such a practice is intended to drive out the competition.
Supersol is expected to announce that it accepts the deal today, and then Clubmarket's court-appointed trustees, Shlomo Nass and Gabi Trabelsi, will submit all the documentation to the court for its approval. Tel Aviv District Court Judge Varda Alshech has already approved the sale and placed the onus on the Antitrust Authority to reach its conclusions with all possible speed, so it is likely that by tomorrow, Clubmarket could already be in the hands of Supersol.
Meanwhile, not all Clubmarket staffers welcomed the move, which effectively saves the company from closure. Some 600 workers will lose their jobs as the new owners close 13 stores, said Albert Ashur, head of the Clubmarket workers committee. Another 400 employees at the chain's headquarters and administration center in the north also face the chop, Ashur said yesterday. This may be a conservative estimate, as other sources in Clubmarket believe that 1,500 out of the total 3,500 employed by the company will eventually lose their jobs after Supersol takes over.
An agreement reached last week between representatives of the workers, Supersol and Clubmarket's trustees, set compensation and pay standards for Clubmarket workers in the event of the deal going through. Those retained will be employed by Supersol as "new staffers," which means a sharp drop in wages for most of them, though they will receive a one-time payment reflecting their length of service with Clubmarket at a cost to Supersol of NIS 65 million. Those who are not taken on will share a NIS 108 million compensation package, above and beyond the legally required severance pay.