Shafir Eyes Paz Control as Finance Ministry Reconsiders Antitrust Stance
Shafir Engineering and Industry is poised to revisit its bid for control of Paz Oil Company after the Ministry of Finance shifted its stance, despite previous antitrust opposition.
Shafir Engineering and Industry, Israel's largest infrastructure and construction group by market cap, is poised to potentially secure control of Paz Oil Company (Paz), despite previous antitrust headwinds. The Tel Aviv-listed giant, valued at NIS 15 billion and controlled by the Harel brothers (Israel, Gil, and Chen Shapira with 14.1% each), reported a 17% surge in revenues for January-June, reaching NIS 3.2 billion.
Five Core Pillars and Growing Energy Ambitions
Shafir's sprawling operations span five core sectors, led by industry and infrastructure, which each accounted for 44% of revenues in the first half of the year. The industrial arm operates three quarries and 44 plants producing concrete, asphalt, cement, and pipes. The infrastructure division handles massive national projects, including the Tel Aviv Light Rail Purple Line, Jerusalem's Green Line, and pre-qualification for the upcoming Tel Aviv Metro tenders.
In addition, Shafir operates in real estate, senior housing through its 'Ad 120' network, and logistics with five modern logistics centers. Its concession portfolio includes the Jerusalem Light Rail Red Line and key toll roads such as the Fast Lane at the entrance to Tel Aviv, Highway 6 North, and Highway 16 in Jerusalem.
Antitrust Hurdles and the Paz Acquisition
In 2023, Shafir acquired a 10% stake in Paz, which operates the Ashdod refinery and supplies 40% of Israel's fuel consumption alongside two power plants generating 109 megawatts. Shafir holds an option to increase its stake to a 65% controlling interest, aiming to leverage its industrial expertise to streamline Paz's operations.
However, the Concentrated Economy Committee recommended in July against granting Shafir control over Paz, citing concerns over economy-wide concentration due to Shafir's dominant footprint in transport and infrastructure. Following a revised stance by the Ministry of Finance, the committee is expected to re-examine the issue, while Shafir defends its position by noting it has divested stakes in major toll roads and natural gas distribution to mitigate concentration concerns.
