The Israel Aerospace Industries (IAI) announced on Wednesday that its board of directors recommended merging its subsidiary, Elta Systems, into IAI. Elta is a company and division within IAI, which is controlled by IAI, with only two shares held by the state.
Elta, headquartered in Ashdod, is responsible for a wide range of advanced technologies. It is the developer and manufacturer of the "Green Pine" radar system, Israel's high-power radar that detects distant targets and ballistic missiles from Yemen, Iran, and anywhere in the Middle East. It is also responsible for the Arrow, David's Sling, and other interception systems.
In addition, Elta is responsible for communication systems, electronic warfare, and tactical radar systems for fighter jets and naval ships, and manufactures maritime tools, including ships such as the Super Dvora, unmanned submarines, and advanced weapon systems. More than seventy percent of the company's transactions are with foreign clients.
According to the proposed framework, all of Elta's activities, assets, rights, and obligations will be fully transferred to IAI without compensation, and Elta will cease to exist as a separate legal entity. Upon completion of the merger, if approved, IAI will become the sole owner of all of Elta's operations.
Merger allows for efficiency, eliminates bureaucracy
IAI CEO Boaz Levy said, "This is a natural and necessary step that allows IAI to operate more efficiently with its customers and aligns with the policy of the Government Companies Authority, which is leading the process to obtain the required permits from the government. Implementing this move during a period of prolonged operations is a strategic step that strengthens the company's flexibility and allows it to respond more quickly to changing needs in the global market."
In practice, Elta operates as a division of IAI and collaborates fully with the company. No organizational changes are expected to affect Elta's employees, and the move's execution will reduce unnecessary bureaucracy.
The proposed merger is expected to be conducted in accordance with the Companies Law as a statutory merger. The implementation of the move is subject, among other things, to approval by the government of Israel under the Government Companies Law, as well as additional approvals as determined by the parties. The company's management has been authorized to engage with the relevant government authorities to facilitate the process, obtain the necessary approvals, and carry out all actions required to implement it.