Israel Approves Defense Merger Ahead of Major IPO

The Israeli government has approved the merger of Elta, a defense technology subsidiary, into Israel Aerospace Industries (IAI), paving the way for a potential massive initial public offering (IPO). The move is designed to consolidate operations and enhance the company's market position ahead of its listing.

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The merger of Elta into IAI is a natural and necessary step, completing the strategic move we have been leading in recent years to turn IAI into a single company.

According to valuations from the Government Companies Authority, IAI could achieve a market valuation of 100 billion shekels (approximately $27 billion). This projection is supported by anticipated 2025 sales reaching $7.8 billion, a net profit of $415 million, and a substantial order backlog of $29 billion. The company currently employs around 15,000 people.

Elta, which specializes in radar, intelligence systems, and unmanned vehicles, will have its operations, assets, rights, and liabilities fully transferred to IAI. While Elta will continue as a named division, it will cease to exist as a separate legal entity. This integration is expected to eliminate bureaucratic inefficiencies that have complicated operations and slowed deal approvals.

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Elta is a central pillar of IAI and so it will remain.

IAI Chairman Boaz Levy described the merger as a "natural and necessary step" toward transforming IAI into a unified company. He emphasized that the consolidation would strengthen the company's ability to operate more efficiently and flexibly, providing a faster and higher-quality response to customers globally. The merger is being conducted in full coordination with employee representatives and is not expected to result in significant organizational changes or affect Elta's workforce.

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Its merger strengthens the company's ability to operate as a more unified, efficient, and flexible firm, and to provide a faster, higher-quality response to our customers in Israel and around the world.