Israeli Government Approves Elta Aerospace Merger Into Israel Aerospace Industries

The Israeli government has approved the merger of Elta Systems, a subsidiary of Israel Aerospace Industries (IAI), into its parent company. Under the approved plan, all of Elta's operations will be fully integrated into IAI without compensation, and Elta will cease to exist as a separate legal entity. The state’s two shares in Elta will be transferred to IAI, making it the sole owner. This move marks the first major step since Boaz Levy was appointed chairman of IAI, reflecting a strategic effort to prepare IAI for a potential public offering.

Officials involved, including the Government Companies Authority, aim to increase IAI’s overall valuation through this consolidation. The Government Companies Authority had initially sought dividends of 8 billion shekels but received only 1.6 billion shekels. Meanwhile, a delegation from New York, including the deputy director of the Government Companies Authority, representatives from Rafael Advanced Defense Systems, Tel Aviv Stock Exchange, and the Ministry of Defense, recently traveled to meet regulators and underwriters to discuss the implications of listing defense companies on the Nasdaq amid disagreements with the Tel Aviv Stock Exchange.

Elta specializes in advanced electronics such as sensors, radars, communication systems, and electronic warfare. It also provides intelligence, surveillance, target acquisition, reconnaissance (ISTAR), early warning and control, homeland security, self-defense, fire control, intelligence applications, and cyber defense services. Over the years, Elta has been led by various CEOs, including Yoav Turgeman, who left in 2024 to become CEO of Rafael. This merger is part of broader efforts to capitalize on new Middle Eastern trade opportunities and strengthen Israel’s defense export sector.