Israeli Defense Tech Sales Abroad Spark Debate on National Security

Recent acquisitions of Israeli defense technology firms, such as Motorola Solutions' purchase of D-Fend for $1.5 billion and Ondas's acquisition of 13 Israeli defense tech companies for over $1 billion by September 2026, highlight an accelerating trend of mergers and acquisitions in the sector. This surge has led some to express concern that "the country's security assets are being sold to the highest bidder," raising questions about Israel's technological and operational independence.

To ensure this acquisition wave serves as a growth engine rather than a strategic threat, clear red lines must be established. The Ministry of Defense's export control agency must prevent sensitive technology from falling into hostile hands or being transferred to prohibited countries. Furthermore, past experiences demonstrate the risks of complete reliance on foreign supply chains during conflict, necessitating guarantees that essential production, maintenance, and supply capabilities remain accessible in Israel during emergencies.

Drawing parallels with the Israeli life sciences sector, where similar concerns about foreign acquisitions leading to the "elimination of local industry" were voiced, offers a potential model. Between 2014 and 2024, the life sciences sector saw 127 acquisitions totaling approximately $21.7 billion. Despite market volatility, Israeli companies continue to be acquired by global players. In most cases, these "exits" have reinvested knowledge, experience, and capital back into the ecosystem, fueling the next generation of technology and entrepreneurship.

While not every acquisition guarantees success, the cumulative experience in life sciences suggests that foreign ownership and capital can contribute to the continued prosperity of the Israeli ecosystem. This is particularly relevant for defense tech, where Israeli companies often struggle to penetrate international markets alone. Foreign acquisition provides crucial scale, access to government contracts, complex procurement standards, and global marketing and distribution channels.

These deals can also have broader economic benefits, such as retaining R&D activities and skilled personnel in Israel while connecting them to larger budgets and markets. They facilitate the recycling of capital and knowledge, as exiting entrepreneurs and investors often establish new companies or invest in startups. Moreover, defense technologies "battle-proven" in real combat conditions, when combined with a global corporation's marketing and distribution networks, can become leading international products.

The challenge lies not in choosing between security and selling companies, but in developing a regulatory framework that allows Israel to benefit from global capital, markets, and scale without relinquishing critical knowledge, capabilities, and independence.