Israel Competition Authority has decided not to appeal against the merger between Mizrahi Tefahot Bank and Union Bank.

Earlier, the regulator blocked the deal citing competition concerns. However, the decision was overturned by Israel’s antitrust court last month.

“The competition commissioner notified the parties to the merger today that after an internal discussion at the Competition Authority it has been decided not to file an appeal against the Competition Court’s ruling,” local publication Globes quoted Israel Competition Authority as saying in a statement.

However, it added that the regulator will be in touch with the banks regarding the issues raised by the court.

In 2017, Israeli lenders Mizrahi-Tefahot Bank and the Union Bank of Israel agreed to merge in an all-share transaction.

During the announcement, the deal was valued at NIS1.4bn ($400m).

Last year, Israel Competition Authority rejected the deal stating that the deal will reduce competition in the sector. Subsequently, Mizrahi Tefahot Bank approached the court challenging the regulator decision.

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

The Ofer and Wertheim group are its controlling shareholders holding around 43.91% of its shares. The remaining stake is with public being traded at Tel-Aviv Stock Exchange.

As of 30 September 2019, Mizrahi-Tefahot Bank had around $76.68bn in total assets.