Ayalon Considers Merger with Altshuler Shaham Amid Regulatory Pressure
Ayalon has reversed course to consider merging its provident and pension operations with Altshuler Shaham under regulatory pressure, creating a giant managing 144 billion NIS.
Insurance and financial group Ayalon has reversed its previous stance, announcing that it is now considering a merger of its provident and pension activities with Altshuler Shaham, following pressure from its parent company, WeSure Global Tech, and the Capital Market Authority.
Initially, executives from both WeSure and Altshuler Shaham insisted that Ayalon and the newly acquired Altshuler Shaham would operate independently as sister companies without any structural merger. However, Ayalon formally announced a complete shift in direction, stating it is reviewing the consolidation of Altshuler Finance and Ayalon's provident and pension operations. Under the revised plan, Ayalon would acquire a minority stake in the new entity and explore broad synergies.
Behind the official announcements lies regulatory pressure from the Israel Capital Market, Insurance and Savings Authority. Regulators made it clear that WeSure would not be permitted to hold two separate provident fund companies simultaneously, and demanded a merger to comply with the Concentration Law and prevent a problematic three-tier corporate structure.
The proposed merger would create a massive financial powerhouse managing roughly 144 billion NIS in assets. Ayalon currently manages 3 billion NIS in provident funds, while Altshuler Shaham manages 107 billion NIS in provident funds and 37 billion NIS in pensions, despite experiencing ongoing client outflows in recent months.
A central point of contention remains the control over investment management. Led by CEO Sharon Reich, Ayalon is demanding that the merged company operate under the Ayalon brand and that its investment team manage the combined portfolios. Meanwhile, Altshuler Shaham intends to preserve its existing investment personnel, led by Leah Perminger, setting the stage for crucial negotiations between the parties.
