Discount Bank Officially Purchased by Bronfman Group

The purchase of Discount Bank from state control by the Bronfman Group was made official Monday afternoon in a signing ceremony held in Tel Aviv.

Matthew Bronfman, who heads the Bronfman Group, met earlier with Finance Minister Benjamin Netanyahu in order to approve the signing.

In late January, a consortium controlled by the Canadian Jewish investor purchased the government's stake in the bank, completing the bank's privatization.

Earlier Monday, a protracted labor dispute at Discount Bank ended, as the parties involved signed an agreement on employees' rights.

Prior to the agreement, Discount's workers had imposed sanctions and later gone on strike, protesting their lack of job security after the bank's privatization.

The parties agreed that workers at Discount and its subsidiary Mercantile Discount would receive NIS 250 million, or six to eight salaries per worker, in two installments. In exchange, the workers will forgo their demand to buy 10 percent of the bank's shares at a discount and to borrow money from the bank at favorable terms to finance the acquisition.

They also agreed that the labor constitution governing the bank workers would remain in force for five years.

In addition, Discount will not be able to sell any assets for five years. If the new owners decide to sell Israel Discount of New York - the most profitable facility in the Discount group - they will need to get permission from employees first.

The agreement was signed by the Finance Ministry, MI Holdings - the government company handling Discount's privatization - and representatives of the bank's 5,500 workers.

Riki Bachar, the chairman of Discount's labor committee, commented that he was glad at the bank's privatization. "I met with the buyers. They seem to be fair people who will act for the benefit of the bank and its workers," he said.