Israel’s State Companies Authority is advancing a broad strategic consolidation plan that would merge six state companies into three, reduce redundant jobs, and streamline politically appointed posts. The initiative, first reported by Globes, is expected to reshape several government-owned bodies in the coming years and save the state millions of shekels.
In real estate, the authority wants to merge the government companies Yarum and Dira Lehaschir. Yarum, founded in the 1970s under the Housing and Construction Ministry, coordinates urban infrastructure, public buildings and housing units, and its assets in 2025 are estimated at 2.5 billion shekels. Dira Lehaschir, founded in 2013, handles land identification, statutory planning and marketing of long-term rental projects. The authority says a combined company could bring together Yarum’s engineering supervision and infrastructure skills with Dira Lehaschir’s planning and marketing abilities, creating a counterweight to the Israel Land Authority, which controls 92% of the country’s land. If approved, the merger would eliminate the need for two currently unfilled political positions, the chairmanship of Yarum and the CEO post at Dira Lehaschir.
In defense, the authority is also promoting the absorption of Elta into Israel Aerospace Industries. IAI reported record 2025 sales of $7.4 billion, gross profit of $1.4 billion and net profit of $712 million, while Elta posted $2.2 billion in sales and $181 million in net profit and employs about 4,700 people. The authority says the move would remove bureaucratic barriers, reduce R&D duplication, unify the company’s market presence and disperse Elta’s board, which had drawn criticism from the state comptroller. It also could enlarge IAI ahead of its planned IPO.
In transportation, State Companies Authority head Roy Kahlon is pushing a merger of Hotsa Israel and Netivei Ayalon. Hotsa Israel, created to build Highway 6, later took on additional projects including metro-bus and light rail lines in the north, while Netivei Ayalon runs urban transport projects worth about 3 billion shekels a year. Officials estimate the merger would save about 80 million shekels annually, improve bargaining power with suppliers and contractors, and speed execution. Transport Minister Miri Regev has reportedly dropped her opposition, and another option under review would split Hotsa Israel’s activities between Netivei Ayalon and Netivei Yisrael.
