Israel Military Industries privatization deal finalized

Sale of IMI to Elbit Systems will clear way for construction of thousands of housing units in high-demand areas.

Arutz Sheva Staff,

IMI development
IMI development

An agreement to privatize IMI Systems (Israel Military Industries) was signed Sunday in Jerusalem.

IMI manufactures weapons, munitions, and develops military technology for Israel's security forces. Under the agreement, shares in IMI Systems will be transferred to Elbit Systems.

The signing ceremony was attended by the Accountant General of the Ministry of Finance, Rony Hizkiyahu, the Head of the Government Companies Authority Yanki Koint, the Director General of the Ministry of Defense Udi Adam, the Head of the Israel Land Authority Adiel Shimron, the controlling shareholder of Elbit Systems Michael Federman and the CEO of Elbit Systems.

The decision to privatize IMI was made by the government in 2013. At the end of a competitive process for the sale of the company managed by the Government Companies Authority in 2015, Elbit remained as the top contender. In June 2017, the Committee for the Sale of State Shares authorized Accountant General Rony Hizkiyahu to negotiate with Elbit on the terms of the sale.

As part of the negotiations, the Accountant General reached an agreement with Elbit, which was approved by the committee, according to which the company would be sold for NIS 1.8 billion ($482 million), of which NIS 1.4 billion ($375 million) would be paid on the closing date and the balance in two installments in 2020 and 2022. An additional NIS 100 million ($27 million) is dependent on results.

The agreements anchor the evacuation of Ramat Hasharon and the Tirat Hacarmel area in a way that will enable the development of tens of thousands of housing units in areas in high demand and the establishment of factories in the Ramat Beka area in the Negev that will promote employment and development. In addition, the agreements protect the competition between the Israeli defense industries and the Ministry of Defense as a central customer of IMI Systems products.

Finance Minister Moshe Kahlon said: "The privatization of IMI will contribute to Israel's economy in several ways: upgrading the defense industries, improving the competitiveness of defense exports, creating independence for society and ending dependence on Israel's defense industry. The creation of thousands of jobs in the Negev and the Galilee, and the evacuation of land for construction for young couples in areas of demand, have [motivated us] to reach the moment of signing, and the State of Israel and all citizens of Israel will benefit from this process in the coming years."

Accountant General Roni Hizkiyahu noted: "The successful completion of the sale of IMI Systems has many advantages, primarily: protecting the interests of the Ministry of Defense, strengthening the healthy competition between the defense industries and contributing greatly to the future of IMI and its employees. I would like to thank the Director General of the Ministry of Defense, the Director of the Israel Land Authority and the employees of the Ministry of Finance and the Attorney General for the close cooperation that resulted in an excellent result for the Israeli economy and its security."