The cabinet on Sunday approved the recommendations of the Committee on Concentration in the Economy, which are intended to increase competition and break up some of the country’s largest conglomerates. The vote was unanimous.

The cabinet instructed Prime Minister Binyamin Netanyahu, Finance Minister Yuval Steinitz and Justice Minister Yaakov Neeman to submit a bill to the Ministerial Legislative Committee.

“Today’s cabinet decision is another step toward lowering the cost of living,” Netanyahu said. “The 100 Days Team emphasized the need to increase competition in the economy, and 18 months ago, this committee was established, the results of which will correct distortions created in recent years, and this government is correcting them.”

Israel has one of the highest concentrations of corporate power in the developed world, with the government estimating that the country’s 10 largest business groups control 41 percent of the market value of public companies.

Conglomerates will have to choose between owning major financial or non-financial companies. Holding companies structured like pyramids will have to limit how many tiers of subsidiaries they have.

Existing groups, which currently hold listed subsidiaries that in turn have their own subsidiaries, will be allowed no more than three tiers of subsidiaries. New conglomerates can have two.

Companies will have four years to comply.

“For years, there was talk about restricting the cartels and monopolies, but we’ve taken action,” Netanyahu said. “We have here a series of very important recommendations. On one hand, daring, but on the other also proportionate to ensure continued competitiveness of our economy and to lower the cost of living.”

According to the recommendations, companies cannot hold a financial firm with assets above NIS 40 billion at the same time it controls a non-financial company of more than NIS 6b. of revenue.

As a result, the IDB Group would have to divest Clal Insurance or other key holdings such as Cellcom, the country’s largest cellphone operator.

Delek Group would have to decide between keeping insurance company Phoenix and brokerage firm Excellence Nessuah or its fuel business, which includes a number of offshore naturalgas fields.

Private-equity firm Apax Partners would need to choose between food maker Tnuva or the Psagot brokerage.

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