Ynet CEO interrogated ahead of failed Taboola-Outbrain merger - report

The raid on Ynet's offices was reportedly part of an investigation carried out by the Competition Authority surrounding the planned merger of Taboola and Outbrain, two Israeli startups.

SEPTEMBER 10, 2020 14:20

Ynet broadcasting studio. (photo credit: Wikimedia Commons) — Ynet broadcasting studio.

(photo credit: Wikimedia Commons)

Investigators from Israel's Competition Authority raided Ynet's main offices in Rishon Lezion on Tuesday, confiscated the personal computer and cellphone of Ynet's CEO Barak Kalmanovich, and interrogated him and other top executives of the news website company, according to Globes.

The raid on Ynet's offices was reportedly part of an investigation carried out by the Competition Authority surrounding the planned merger of Taboola and Outbrain, two Israeli start-ups that provide publishers with ad-based content recommendation platforms.

The $850 million merger, according to TechCrunch, would have been one of the largest merger deals to take place in Israel's tech industry, and would have consolidated two competitors seeking to take on Google and Facebook in the world of online advertising.

The deal, first discussed as early as 2015, had been approved in the US and Germany, but not in Israel and the UK, with Israel's Competition Authority reportedly looking into suspicions of collusion taking place between the companies ahead of the merger.

According to TheMarker, the authority began looking into Kalmanovich's involvement in the expected deal, which led to the raid on Ynet's offices earlier this week. Kalmanovich reportedly expressed support for the merger in the past, but at this point it is still unclear what he is suspected of.

And in a surprising turn of events, Globes reported on Wednesday that the merger between Taboola and Outbrain, which had been years in the making, had been called off.

The reasons behind the deal's collapse are not completely clear at this point. According to Globes, one explanation is Taboola's attempts to obtain better terms.

Other explanations regard the bank's refusal to extend the finance agreement with Taboola beyond its expiry date last month.

Whether the unexpected announcement has anything to do with the investigation launched by Israel's Competition Authority is still unknown.

“We’ve seen changing conditions in the market due to COVID-19, and we decided to terminate the deal,” an anonymous source close to the merger told TechCrunch. “It’s been such a long road, and it’s not great… but walking away is the right move.”

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“No one gets divorced because they’re happy,” another source added.