Transfers Of Data Base In M&A Transactions

The Israeli Law, Information and Technology Authority (ILITA) recently published a new draft directive regarding the handling of customers' personal information (which is organized as a registered database or as a database under compulsory registration) when it is held by an acquiree company and is being transferred to the acquirer company within the scope of a merger or acquisition transaction. In this context, the draft applies to acquisitions of assets, acquisitions of companies, company mergers, and receiverships.

The draft directive asserts that customers' personal information is not the property of the acquiree, even when the acquiree's business is based on this personal information, but rather that it belongs to the customers themselves. Thus, the acquiree cannot transfer such personal information as it deems fit.