The trustbuster has put the kibosh on a merger request from Israel Salt Industries and Dead Sea Industries.

Antitrust Commissioner Dror Strum ruled that Salt Industries has a monopoly over marketing salt in Israel, while Dead Sea Industries has a stranglehold over producing it. Their merger would create a monopoly that would be detrimental to competition.

Strum rejected Salt Industries CEO Nadav Shahar's claims that the merger would not adversely affect Israel's salt industry, and that its aim is to promote the two companies' interests overseas.

The Antitrust Authority and the two salt companies agreed to shortly sign a decree annulling the exclusive marketing agreement under which Salt Industries is the sole marketer of Dead Sea Industries' salt.

Under the new arrangement, Dead Sea Industries will undertake to market salt at an identical price to other salt marketers. But it will be entitled to give discounts on bulk.

Strum told the two companies that that the agreement between them was in violation of antitrust laws and that Dead Sea industries was subject to those laws despite a clause in the concession agreement between it and the state that prima facie exempts it from antitrust laws.

He also clarified that annulment of the exclusive marketing agreement did not guarantee the merger between the two companies and that it resulted from the need to ensure competition.

In May 2002 Dead Sea Industries and Israel Salt Industries notified the Tel Aviv Stock Exchange that they had signed an agreement to merge their salt operations. Under the terms of the agreement the companies were to have set up a new jointly held company that was to have purchased Dead Sea Industries salt manufacturing facility for $15 million.

The companies also announced that at the Antitrust Authority's demand they had cancel their exclusive marketing agreement and that Dead Sea Industries would pay $1 million compensation to Salt Industries for the cancellation.

However, Antitrust Authority inquiries revealed that Dead Sea industries was still refusing to sell salt to other marketers at the same price it was selling to Salt Industries.