Israel’s antitrust court has approved the previously announced merger of Mizrahi-Tefahot Bank and Union Bank.

The ruling overturns an earlier decision by the Israeli Competition Authority.

In 2017, Mizrahi-Tefahot Bank signed an agreement to acquire local rival Union Bank of Israel through an all-share transaction. At that time, the deal was valued at NIS1.4bn ($400m).

The arrangement included purchasing 75% stake from Yeshayahu Landau and Shlomo Eliyahu Holdings- the controlling shareholders of Union Bank.  The plan also included snapping up the remaining stake through a public offer.

However, Israeli Competition Authority blocked the deal last year over concerns that the merger will reduce competition over private customers in the banking sector.

Subsequently, Mizrahi-Tefahot Bank announced its plans to appeal against the decision.

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However, in the ruling, the court green lighted the merger having found no evidence that can affect competition. But the court also noted that the acquisition must abide by certain conditions regarding credit services to the diamonds business, reported Reuters.

Mizrahi-Tefahot Bank is the third largest lender in Israel based on the value of assets.

It provides international, commercial, domestic and personal banking services.

As of 30 September 2019, Mizrahi-Tefahot Bank had around $76.68bn in total assets. In the first nine months of this year, the bank reported $644.74m in operating profit before taxes and $402.64m in net profit.