Israel Aerospace Industries Merges Radar Unit Elta Ahead of 2027 IPO

Israel Aerospace Industries (IAI) has approved the merger of its subsidiary Elta Systems, a key producer of radar systems for air defense, with its parent company. The merger, initiated by the Government Companies Authority about a year ago, aims to streamline operations and reduce overhead costs for Elta, which are estimated at tens of millions of shekels annually due to separate administrative structures. Elta will become one of IAI's four main business divisions, alongside military aircraft, missile and space systems, and aviation. This integration is expected to enhance the global competitiveness of both entities by enabling IAI to market Elta's advanced radar systems alongside its own. The merger, which received government approval in July and Elta's board approval in recent months, will also eliminate the need for separate boards of directors. All approximately 4,500 Elta employees will become IAI employees, with their employment terms preserved, according to company officials. Elta, managed by Dror Bar, is a significant contributor to IAI's sales, accounting for about a quarter of the total, with sales reaching approximately $2.2 billion in late 2025, compared to IAI's total sales of about $7.4 billion in the same period. Elta's primary operations are in Ashdod, focusing on radar development and manufacturing for Israel's vital air defense systems like Arrow, Iron Dome, and David's Sling, and it also incorporates IAI's land systems division dealing with robotics and autonomous vehicles. Separately, IAI's board, chaired by Boaz Levy, also approved the appointment of Shlomi Sudari as the director of the company's Missile and Space Division. Sudari, who previously held significant defense roles and managed the company's space factory for seven years, replaces Guy Barlev, who was recently appointed CEO of IAI following Levy's promotion to chairman. The Missile and Space Division is IAI's most profitable, with sales of about $3.5 billion in late 2025, encompassing the development and production of air defense missiles, reconnaissance and communication satellites, loitering munitions, and precision ground-to-ground missiles.